WHICH? 

•  PROTECTION,  FREE  TRADE, 

OB 

REVENUE  REFORM. 


A  COLLECTION  OF   THE    BEST   ARTICLES  OX  BOTH   SIDES   OP  THIS   GREAT 
NATIONAL  ISSUE,  TfllOM   THE    MOST   EMINENT 

POLITICAL  ECONOMISTS  AND  STATESMEN. 

AMONG    WHOM    ARE 


HENRY  CLAY, 
HENRY  C.  CAREY, 
DANIEL  WEBSTER, 
HORACE  GREELEY, 

FRANCIS  Bo  WEN,   (Prof.  Harvard  Uni- 
versity,) 


ADAM  SMITH,  LL.D.,  F.R.S., 

JEANE  BAPTISTE  SAY, 

FRANCIS  WAYLAND,  LL.D.,  (Pres't 
Brown  University,) 

AMASA  W.M.KKII,  LL.D.,  (Amherst  Col- 
lege,) 

JOHN  BASCOM,  (Pres't  Wis.  State  Uni- 
versity,) 


Prof. W.D.WILSON,  (Cornell University,)  j    ARTHUR  LATHAM  PERRY,  ( Williams Col- 


JOHN  L.  HAYES,  LL.D.,  (Pres't  of  the 
late  Tariff  Commission,) 

Prof.  ROBERT  E.  THOMPSON,  M.A  ,  (Uni- 
versity of  Penn.,) 
HENRY  CAREY  BAIRD, 
Hon.  JUSTIN  S.  MORRILL, 
Hon.  WM.  P.  FRYE, 
Hon.  SAMUEL  J.  RANDALL, 
ABRAHAM  LINCOLN, 
Hon.  JAS.  A.  GARFIELD, 
Hon.  JAMES  G.  BLAINE,  LL.D., 


lege,) 

WM.  (i.  SUMNER,  (Yale  College,) 
AARON  L.  CHAPIN,  D.D.,  (Pres't  Beloit 

College,) 
lion.  HENRY    FAAVCETT,  M.P.,  LL.D., 

D.C.L.,  F.R.S.,  (Prof,  in  Cambridge 

University,  England,) 
THOS.  G.  SHEARMAN,  Esq., 
lion.  DAVID  A.  WELLS, 
RICHARD  COBDEN,  M.P., 
JOHN  STUART  MILL, 
Prof.  EMILE  DELAVELEYE, 
Prof.  M.  FREDERIC  BASTIAT, 


AND   MANY    OTHERS. 


I.    F.   SEGNER   &  CO., 


COPYRIGHT,  1884, 

By  PARK  PUBLISHING  COMPANY 
5 


THE  CASE,   LOCKWOOD  &  BRAINARD  CO., 

PRINTERS  AND  BINDERS, 

HARTFORD,  CONN, 


PREFACE. 


The  object  of  this  work  is  to  bring  before  the  public  a 
volume  that  contains  the  best  things  written  both  for  and 
Against  Protection.  In  selecting  the  articles  I  have  con- 
sulted the  authors  when  possible,  and  am  indebted  to  them 
for  much  assistance  and  many  kind  suggestions. 

One  important  object  was  to  make  an  inexpensive  work. 
We  felt  that  the  masses  were  detained  or  discouraged  from 
gaining  important  information  on  a  great  and  vital  National 
issue,  because  of  the  expense  or  trouble  involved.  We  have 
therefore  collected  in  this  volume  what  would  previously 
require  the  purchase  of  a  library  to  obtain. 

H.  W.  FURBER. 

E.  NOKTHWOOD,  N.  H. 


CONTENTS, 


CHAPTER  I. 

PAGE. 
INTERNATIONAL  TRADE;  By  Aaron  L.  Chapin,  D.D.  .        13 

CHAPTER  II. 
MODERN  POLITICAL  ECONOMY  ;  By  Adam  Smith,  LL.D., 

F.R.S. 25 

CHAPTER  III. 
EFFECTS  OF  REGULATIONS  PRESCRIBING  THE  NATURE  OF 

PRODUCTS;  By  Jean-Baptiste  Say.  .  44 

CHAPTER  IV. 

SPEECH  OF  HENRY  CLAY  IN  DEFENSE  OF  THE  AMERICAN 
SYSTEM,  in  the  Senate  of  the  United  States,  February  2, 
3,  and  6,  1832.  ......  62 

CHAPTER  V. 
PROTECTION  AND  FREE  TRADE  ;  By  John  Stuart  Mill.        .        84 

CHAPTER  VI. 

SPEECH  OF  HORACE  GREELEY  ON  THE  GROUNDS  OF  PRO- 
TECTION. .......  100 

CHAPTER  VII. 
PROTECTING  DUTIES;   By  Francis  Wayland,  D.D.,  IdLD., 

President  of  Brown  University.     .  .  .  .124 

CHAPTER  VIII. 
FAILURE  OF  REVENUE  TARIFF  AND  OTHER  SUBJECTS;  By 

Henry  C.  Carey.     A  letter  addressed  to  President  Grant.       132 

'CHAPTER  IX. 
V/THE  FALLACIES  OF  THE  PROTECTIVE  THEORY;  By  Hon. 

Amasa  Walker,  LL.D.,  late  lecturer  in  Amherst  College.      143 


CONTENTS. 


CHAPTER  X. 

PAGE. 
THE  DOCTRINE  OF  INTERNATIONAL  EXCHANGES:  THE  LIMITS 

OF  FREE  TRADE  AND  THE  PROTECTIVE  SYSTEM;  By 
Prof.  Francis  Bowen,  Alford  Professor  of  Natural 
Religion,  Moral  Philosophy,  and  Civil  Polity,  in  Har- 
vard University.  ......  160 

CHAPTER  XI. 
FREE  TRADE;  By  Richard  Cobden,  M. P.      .  .  .       180 

CHAPTER  XII. 

WEBSTER'S  CHANGE  OF  VIEWS;  Speech  of  Mr.  Webster  of 
Massachusetts,  on  the  Tariff,  in  the  Senate,  July  25, 
and  27,  1846.  .  .  .  ...  .193 

CHAPTER  XIII. 
DOES  PROTECTION  PROTECT  ?    Thomas  G.  Shearman,  Esq.      203 

<  CHAPTER  XIV. 

THE  NECESSARY  FOUNDATIONS  OF  INDIVIDUAL  AND  NA- 
gc  TIONAL  WELL-BEING,  AND  OF  CIVILIZATION;  By  Henry 
k,  Carey  Baird.  ......  231 

H  CHAPTER  XY. 

re  PROTECTION  AND  FREE  TRADE  ;  By  Right  Hon.  Henry 
Faucet,  M.P.,  D.C.L.,  F.R.S.,  Professor  of  Political 
Economy  in  the  University  of  Cambridge.  .  .  251 

CHAPTER  XYI. 
PROTECTION  AND  ITS  USES;  By  Professor  W.  D.  Wilson, 

Cornell  University.  .  .  .  .  .291 

CHAPTER  XVII. 
SPEECH  OF  HON.  GEORGE  MCDUFFIE,   of  South  Carolina, 

in  the  Senate,  January  29,  1844.     .  .  .  .296 

CHAPTER  XVIII. 

THE  TARIFF;  By  Hon.  Justin  S.  Merrill  of  Vermont,  in 
the  Senate  of  the  United  States,  December  8,  1881,  on 
the  Bill  to  Establish  a  Tariff  Commission.  .  .  307 


CONTENTS. 


CHAPTER  XIX. 

PAGE. 
THE    ESTABLISHMENT    OF  PROTECTION    IN   THE    UNITED 

STATES;  By  Prof.  W.  G.  Sumner,  Yale  College.         .      331 

CHAPTER  XX. 

TARIFF  COMMISSION;  By  Hon.  Samuel  J.  Randall  of  Penn- 
sylvania.       .......      353 

CHAPTER  XXI. 
A 

FREE  TRADE  ;  By  Hon.  Frank  H.  Hurd.        .  .  .      362 

CHAPTER  XXII. 
THE  TARIFF;  By  Hon.  Win.  P.  Frye.  .  .  .371 

CHAPTER  XXIII. 
NECESSITY    AND    BENEFIT    OF    THE    SPEEDY    REDUCTION 

OF  TARIFF  TAXATION;  By  Hon.  D.  A.  Wells.     .  .      401 

CHAPTER  XXIY. 
VIEWS  OF  PRESIDENT  LINCOLN.         ....      428 

CHAPTER  XXY. 

THE  TARIFF  ;  By  Hon.  John  Randolph  Tucker  of  Virginia, 

in  the  House  of  Representatives,  Friday,  May  5,  1882.  .      429 

CHAPTER  XXVI. 
FREE  TRADE;  By  Hon.  John  Q-.  Carlisle.       .  .  .436 

CHAPTER  XXVII. 
FREE  TRADE  FOR  SHIPPING;  By  Hon.  James  G.  Blaine, 

LL.D.  .  .  .  .  .  .  .443 

CHAPTER  XXVIII. 
"  SOMETHING  ELSE;  "  By  M.  Frederick  Bastial,  Member  of 

the  Institute  of  France.       .....      446 

CHAPTER  XXIX. 

FREE  TRADE;  By  Prof.  Emile  De  Laveleye.  .  .  .      451 

CHAPTER  XXX. 
TARIFF  AND  WAGES;  F.  W.  Taussig. ....      455 


8  CONTENTS. 


CHAPTER  XXXI. 

PAGE. 
FREE  TRADE  SHOULD  BE  THE  ULTIMATE  END  AND  AIM 

OF  TARIFF  LEGISLATION;  Ex-President  James  A.  Gar- 
field.  ........      457 

CHAPTER   XXXII. 

TARIFF  REFORM;  Hon.  William  R.  Morrison.  .  .      459 

CHAPTER  XXXIII. 
BUSINESS  DEPRESSION  AND  REVENUE  REFORM;  Abram  S. 

Hewitt.         ......  .      469 

CHAPTER  XXXIV. 

THE  FARMERS'  QUESTION;  John  L.  Hayes,  LL.D.   .  „      479 

CHAPER  XXXY. 
THE  INTERESTS  OF  THE  FARMER  INDEFINITELY  POSTPONED  ; 

Prof.  John  Bascom.  ...  .  .  .502 

CHAPTER  XXXVI. 
THE  GROUND  OF  PROTECTION  CHANGED;  Horace  White.  .      504 

CHAPTER  XXXVII. 
PROTECTION  DOGMAS;  Hon.  Win.  M.  Springer.          .  .      508 

CHAPTER  XXXVIII. 
PROTECTION  REDUCES  PRICES;  Prof.  Robert  E.  Thompson, 

M.A. 510 

CHAPTER  XXXIX. 
DOES  PROTECTION  RAISE  PRICES?  Prof.  A.  L.  Perry.         .      514 

CHAPTER  XL. 

COMPARING  AMERICAN  WAGES  WITH  ENGLISH  WAGES,  and 
showing  how  small  the  difference  in  the  pay,  and  how 
small  a  tariff  would  be  needed  to  protect  American  labor 
if  raw  materials  were  free.  ....  521 


EMINENT  MEN 


WHOSE  OPINIONS  ARE  CONTAINED 

Adams,  John,     .... 

Adams,  John  Quincy,     . 

Baird,  Henry  Carey,      .  r 

Bascom,  John,    .... 

Bastiat,  M.  Frederic, 
•  Bayard,  T.  F.,    . 

Beck,  Jas.  B.,     . 

Beecher,  Henry  Ward, 

Blanqui,  Jerome  Adolphe, 
f  Blaine,  James  G., 

Bowen,  Francis, 

Calhoun,  John  C., 

Carey,  Henry  C., 
'  Carlisb,  John  G., 

Chapin,  Aaron  L., 

Clay,  Henry,      .... 

Cleveland,  Grover, 

Cobden,  Richard, 

Dodge,  J.  R.,      . 
>  Edmunds,  Geo.  F., 

Fawcett,  Henry, 

Franklin,  Benj., 
«Frye,-Wm.  P.,   . 

Garfield,  Jas.  A, 

George,  Henry, .... 

Gladstone,  Wm.  E.,       . 

Greeley,  Horace, 

Hamilton,  Alexander,    . 

Hayes,  John  L.,  ... 

Hayne,  Robert,  .... 

Hendricks,  Thomas  A., . 

Hewitt,  Abram  S.,          . 
'  Hoar,  Geo.  F.,   . 

Hurd,  Frank  H., 


IN  THIS  BOOK. 

Page 
317 

347,  451 

231-250 

502-3 

446-450 

316 

360,  392 

542-544 

44 

443-445 

160-179 

317,  336,  551 

133-142 

436-442- 

13-24 

62-83 

532-541 

180-192 

241-243 

541 

251-290 
550 

371-400 

457-8 

546 

548 

100-123 

65,  122,  317,  550 

477-501 

371 

360 

469-476 

549 

362-370 

09 


10 


INDEX. 


Jackson,  Andrew, 

Jefferson,  Thomas, 

Kelley,  Wm.  D., 

Laveleye,  Emile  De, 

Lincoln,  A., 

List, 

McDuffie,  Geo.,  . 

McCullock, 
-McKinley,  Wm.,  Jr., 

Madison,  James, 

Marshall,  Wm., 

Mill,  John  Stuart, 

Mongredien,  A., 

Monroe,  James, 

Morrell,  Justin  S., 

Morrison,  Wm.  R., 

Newhall,  Howard  M.,    . 

O'Connell,  Daniel, 

Perry,  Arthur  Latham, 

Polk,  James  K., 

Porter,  Robert  P., 
<•  Randall,  Samuel  J., 

Ricardo, 

Say,  Jerome  Baptiste,     . 

Schcenhof,  J.,     . 

Shearman,  Thos.  G., 
«  Sherman,  John, 

^mith,  Adam,    . 
*  bpringer,  Wm.  M., 

Stephens,  Thadeus, 

Sumner,  Wm.  G., 

Taussig,  F.  W., 

Thompson,  Robert  E.,    . 

Tucker,  John  Randolph, 

Walker,  Amasa, 

Washington,  George,     . 

Wayland,  Francis, 

Webster,  Daniel, 

Wells,  David  A., 

White,  Horace,  . 

Wilson,  W.  D.,  . 


Page 

350,  551 

317,  550 

487 

451-454 
428 
293 

296-306 
511 

365,  547 

.  315,  318,  332,  551 

382,412 

84-99 

499 

332,  335,  551 

307-330 

459-468 

411 

549 

514-520 
319 
545 

353-361 

122 

44-61 

521-528 

202-230 

372,  529-532 

25-43 

508-9 

322 

331-352 
455-6 
510-513 
429-435 
143-159 
64,  550 
124-132 
193-202 
401-427 
504-507 
291-295 


CHAPTER  I. 

INTERNATIONAL    TRADE. 
BY  AARON  L.  CHAPIN,  D.D. 


PRESIDENT  CHAPIN  of    Beloit    College,   has    well 
stated  in  his  "  First  Principles  of  Political  Economy," 
the  arguments  for  and  against  Protection.     I  will  give  them 
in  full. 

The  Theory  of  Protection  distinctly  stated  is,  that,  in 
order  to  promote  home  industry,  the  importation  of  certain 
articles,  from  countries  where  they  can  be  produced  cheaper 
than  at  home,  should  be  prohibited  or  restricted  -by  heavy 
duties. 

In  direct  opposition  to  this, — 

The  Theory  of  Free  Trade  affirms  that  a  nation's  wealth 
and  prosperity  are  best  promoted  by  maintaining  the  utmost 
freedom  for  the  exchange  of  all  commodities  among  its  ow~ 
people,  and  with  the  people  of  other  countries. 

The  mere  statement  of  the  principles  suggests  two  con- 
flicting economic  systems.  In  practical  legislation  two  cor- 
responding policies  have  been  in  conflict  through  all  the 
history  of  our  nation.  There  seems  no  place  for  compro- 
mise: truth  and  wisdom  must  lie  on  one  side  or  the  other. 

In  the  discussion  of  each  department  of  our  science, 
freedom  appears  as  the  natural  law  of  industry  and  trade. 
But  on  the  face  of  it  the  theory  of  protection  involves  an 
interference  with  freedom ;  an  interference  which  affects  all 
of  the  four  departments, — production,  consumption,  distri- 

(13) 


14  INTERNATIONAL   TRADE. 

button,  and  exchange,  though  applied  most  directly  to  the 
last  named.  Is  it  not  plain,  then,  that  the  presumption  is 
against  the  theory  that  the  burden  of  proof  is  laid  over 
upon  its  advocates  ?  What  are  the  arguments  urged  to 
sustain  it?  We  can  notice  only  the  three  most  important 
and  plausible.  It  is  said, — 

1.  Protection  is  necessary  to  secure  that  variety  of  indus- 
try and  that  balance  of  different  industries  which  are  essen- 
tial to  a  people's  prosperity.  This  is  the  broad  proposition 
which  underlies  and  includes  all  arguments  for  the  system. 
In  form  the  argument  is  logical.  It  gives  for  a  major 
premise  the  affirmation  that  a  varied  and  balanced  industry 
is  essential  to  a  people's  prosperity.  The  minor  premise  is 
that  protection  is  a  necessary  means  to  varied  and  balanced 
industry.  If  the  premises  are  admitted,  the  conclusion  is 
sound:  a  protective  policy  must  favor  a  people's  prosperity. 

The  truth  of  the  major  premise  cannot  be  questioned. 
On  the  other  hand,  it  is  worthy  to  be  presented  in  full  force, 
resolved  into  several  particulars,  as  a  kind  of  summary  of 
economic  principles. 

a.  Every  country  has  a  great  variety  of  resources,  and 
the  development  of  all  its  resources  conduces  to  its  greatest 
wealth. 

5.  Among  the  population  of  every  country  there  is  a 
corresponding  diversity  of  native  talent,  and  labor  is  most 
effective  when  every  one  has  scope  for  doing  that  for  which 
he  is  best  fitted. 

c.  The  actual  wants  of  men  are  equally  diverse,  and  the 
"highest  happiness  of    a  people  depends  on  the  degree  in 
which  these  varied  wants  are  provided  for. 

d.  A  diversity  of  occupations  makes  a  home-market  for 
all  sorts  of  products,  saving  cost  of  transportation,  favoring 
division  of  labor,  and  binding  all  classes  together  by  ties  of 
mutual  helpfulness  and  common  interests. 

e.  Varied  industry  favors  the  social  and  moral  advance- 


INTERNATIONAL   TRADE.  15 

ment  of  a  people,  quickening  and  broadening  minds,  enlarg* 
ing  hearts,  and  impelling  to  noblest  action  in  the  lines  of 
rectitude  and  benevolence. 

These  statements  will  be  readily  accepted  by  all  candid 
minds.  As  bearing  on  the  question  under  consideration, 
they  need  but  a  single  qualification.  It  does  not  follow  that 
a  people  must  hasten  by  all  means  to  develop  every  source 
of  wealth  existing  among  them,  or  maintain  at  all  hazards 
every  possible  form  of  industry.  The  people  of  Barbadoes 
have  ample  facilities  for  raising  table  vegetables,  but  they 
have  greater  advantages  for  raising  sugar.  Hence  it  may 
be  good  policy  for  them  to  produce  mainly  sugar,  and  get 
the  other  provisions  from  other  countries,  where  the  cost  of 
raising  them  is  greater,  perhaps,  than  it  would  be  on  their 
own  soil.  Many  such  cases  do  exist,  but  they  are  exceptions 
which  prove  the  rule. 

,  The  real  issue  is  joined  on  the  second  or  minor  premise,—- 
protection  is  necessary  to  secure  diversified  industry.  This 
proposition  is  met  by  a  flat  denial,  and  the  positive  affirma- 
tion that  there  is  a  better  and  surer  way  of  reaching  that 
result.  Where  no  interference  or  obstruction  is  allowed, 
there  comes  a  spontaneous  development  which  is  safe  and 
constant,  because  it  is  in  accordance  with  nature's  law. 
This  thought  may  be  unfolded  in  a  few  distinct,  yet  con- 
nected, propositions. 

a.  There  is  a  natural  growth  of  human  industry,  the 
laws  of  which  are  as  fixed  and  certain  as  those  which  per- 
tain to  the  growth  of  a  tree. 

I.  Free  competition  is  the  healthy  stimulus  to  that 
growth. 

c.  Under  the  natural  law  of  development,  industry  will 
be  applied  to  the  several  native  resources  of  a  country  as 
fast  as  the  increase  of  labor  and  capital  will  warrant. 

d.  Men's   instinct   for   accumulation,    following   diverse 
individual  capacities,  tastes,  and  predilections,  is  the  safest 


16  INTERNATIONAL   TRADE. 

guide  to  determine  the  order  in  which  labor  and  capital  shall 
be  applied  to  those  various  resources.  Under  it,  whatever 
promises  a  profit  will  be  undertaken  as  soon  as  it  can  be 
without  sacrificing  a  great'er  profit  elsewhere. 

e.  The  attempt  to  force  labor  and  capital  into  certain 
employments  before  their  time  deranges  the  order  of  nature, 
and  produces  reactions  which  hinder  the  desired  result. 

/.  At  any  stage  of  this  development,  if  exchange  is  free, 
foreign  products  are  purchased  with  the  fruits  of  a  people's 
most  effective  labor,  that  is,  with  those  articles  which  they 
can  then  produce  to  the  best  advantage;  which  they  can  best 
afford  to  part  with,  because  they  are  obtained  at  the  least 
cost.  By  all  such  advantageous  trade,  capital,  the  prime 
element  of  varied  industry,  is  increased,  and  labor  is  sus- 
tained. 

g.  When,  by  this  natural  progress,  a  people  come  to  take 
up  a  new  industry  for  which  they  have  natural  advantages 
and  God-given  capacity,  no  foreign  competition  can  crush  it; 
for,  even  in  its  infancy,  it  is  charged  with  the  nation's  life 
and  strength. 

h.  An  industry  which  is  not  indigenous,  which  has  no 
natural  advantages,  or  which  is  prematurely  set  up  and 
fostered  by  artificial  means,  can  have  only  a  sickly,  uncertain 
life,  and  is  supported  at  a  wasteful  expenditure  of  a  nation's 
resources. 

The  strong  reason  urged  on  the  other  side  to  prove  that 
protection  is  necessary  is  thus  presented: — 

"  Foreign  competition  crushes  out  the  home  production  of 
all  but  the  rudest  and  coarsest  articles  of  manufacture,  and 
prevents  the  establishment  of  a  varied  industry,  unless  the 
government  interfere,  as  the  personification  of  the  nation 
and  its  co-ordinating  power,  to  restore  the  equilibrium  by 
discouraging  imports." 

If  the  question  is  raised,  how  foreign  competition  is  able 
to  do  this,  the  answer  must  be  that  the  foreign  country  has 


INTERNATIONAL   TRADE.  17 

either  superior  natural  resources,  or  more  abundant  capital, 
or  laborers  in  greater  numbers,  and  better  skilled  for  the 
Work  to  be  done,  or  possibly  all  these  advantages  combined. 
If  this  be  so,  it  may  be  asked  again,  how  can  government 
interference,  discouraging  imports,  counterbalance  these 
advantages?  It  is  quite  evident  that  protection  cannot  add 
to  the  natural  resources  of  a  country.  It  can  never  give  to 
France  the  coal-fields  of  England,  nor  bring  to  the  prairies  of 
Illinois  the  water-powers  of  New  England,  nor  secure  to 
Germany  the  cotton-raising  facilities  of  our  Southern  States. 
(  Obviously  a  protective  tariff  cannot  create  capital.  )  Capital 
springs  and  grows  only  by  industry  and  frugality.  It  is  the 
fruit  of  saving.  /  And  certainly  legislation  has  no  power  to 
create  men,  or  endow  them  with  skill/  Population  increases 
both  by  births  and  immigration,  according  to  the  abundance 
of  the  necessaries  of  life  which  are  furnished ;  and  a  people 
grow  in  skill  as  they  graw  in  intelligence,  and  bring  their 
faculties  into  active  exercise. 

All  that  protection  can  do  is  to  concentrate  capital  and 
labor  on  one  employment,  and  for  this  it  lays  a  special  bur- 
den on  all  others  for  the  benefit  of  the  favored  occupation. 
The  advocates  of  this  policy  keep  out  of  sight  the  fact  that 
it  can  do  nothing  more  than  to  change  the  direction  of  capi- 
tal and  labor,  and  that  the  duty  is  a  tax  laid  upon  the  many 
for  the  benefit  of  a  few.  When  articles  of  foreign  produc- 
tion are  imported,  they  are  to  be  paid  for  by  the  products  of 
home-labor,  and  capital;  and  the  question  of  economy  is 
Which  is  the  cheapest?  Which  will  bring  the  largest  returns 
for  a  certain  amount  of  labor,  —  to  make  these  articles  our- 
selves, or  to  make  something  else  with  which  to  buy  them? 
Left  free  from  government  interference,  home  labor  and  cap- 
ital will  lay  hold  of  whatever  natural  resources  a  country 
possesses,  and,  with  reference  to  both  home  wants  and  for- 
eign wants,  produce  the  things  most  feasible  and  desirable  at 
the  cheapest  rates.  The  surplus  of  these  products  will  pay 


18  INTERNATIONAL   TRADE. 

for  the  foreign  goods.  Capital  will  be  increased  by  both  the 
productive  industry  and  the  trade;  and,  as  a  people  grow 
strong  in  capital  and  in  men,  it  is  not  possible  for  foreign 
competition  {o  restrict  their  industry,  or  to  prevent  their 
taking  up  all  the  variety  of  industry  which  their  needs  require, 
and  the  facilities  of  their  country  favor.  Competition,  free 
and  fair,  is  ever  the  strongest  and  healthiest  stimulus  of  both 
productive  industry  and  wide-spread  active  trade. 

2.  It  is  strongly  urged  that  protection  is  a  necessary 
means  of  maintaining  national  independence.  This  is  a  spe- 
cious argument,  because  the  phrase  "  national  independence  " 
has  a  patriotic  ring,  to  which  the  popular  ear  and  the  popu- 
lar heart  are  peculiarly  sensitive.  But,  as  it  stands  in  the 
proposition  before  us,  it  simply  covers  a  subtle  sophistry. 

For  individuals  and  for  nations  there  are  two  kinds  of  inde- 
pendence. One  may  withdraw  from  his  fellow-men  to  a  cavo 
in  the  wilderness,  and  thus  keep  himself  alive,  and  possibly 
find  interest  and  enjoyment  in  a  hermit-life.  He  may  glory 
in  his  independence.  But  is  there  anything  noble  in  such 
isolation?  Is  it  the  way  for  a  man  to  make  the  most  of  him- 
self? The  independence  of  genuine  manhood  is  of  another 
sort.  It  is  the  individuality  of  capacities,  acquisitions,  and 
character,  which  is  able  to  stand  on  its  own  basis  in  full  and 
free  relations  with  fellow-men.  It  is,  in  the  midst  of  society, 
a  distinct  personality,  giving  and  receiving,  supporting  and 
supported,  -blessing  and  blessed,  through  the  varied  inter, 
course  which  nature  prompts,  and  by  which  the  completest 
development  of  the  man  and  of  the  race  is  advanced.  So  of 
nations,  there  is  an  independence  of  isolation,  such  as  China 
and  Japan  until  recently  maintained.  But  that  independ- 
ence which  is  the  strength  and  glory  of  a  nation  is  of  another 
kind.  It  is  an  individuality  of  national  resources  and  char. 
acter  which  stands  up  in  the  full  brotherhood  of  nations,  and 
in  the  consciousness  of  its  own  strength  enters  into  all  offices 
of  mutual  dependence  through  which  nations  grow,  and  civ- 
ilization makes  progress. 


INTERNATIONAL   TRADE.  19 

The  policy  of  protection  fosters  the  narrower  kind  of  inde- 
pendence.  It  is  a  restrictive  policy.  Carried  out  to  its  logi- 
cal conclusion,  it  leads  to  isolation.  The  sophistry  referred 
to  consists  in  the  concealment  of  this  fact,  while  the  term 
" national  independence"  is  put  forth  in  its  broader,  nobler 
sense. 

In  an  economic  point  of  view,  the  real  independence  of  a 
nation  is  commercial  independence.  That  means,  not  that  it 
does  not  need  or  will  not  have  the  productions  of  other 
nations,  but  that  it  is  able  to  command  them.  The  basis  of 
such  independence  is  the  home-production  of  wealth.  The 
way  to  increase  wealth  is  to  use  to  the  best  possible  ad  van. 
tage  the  gifts  of  nature,  and  then,  in  the  world's  great  mart, 
sell  where  things  can  be  sold  on  the  best  terms,  and  buy 
where  things  can  be  bought  on  the  best  terms.  The 
*  nation  is  strongest  and  most  complete  in  her  independence, 
which  can  open  most  freely  every  avenue  for  the  wealth  of 
the  world  to  flow  in  upon  her.  because,  as  the  fruit  of  her  own 
*  vital  energies,  freely  exerted,  she  has  wealth  in  abundance  to 
give  a  fair  equivalent. 

A  nation  comes  to  this  full  maturity  by  a  steady  natural 
growth,  just  as  a  child  comes  to  full  manhood.  In  both  cases 
freedom  is  the  law  of  growth.  Fair  competition  helps  a 
nation's  growth  both  in  general  wealth  and  in  particular 
industries/ just  a*  the  wrestling  of  a  boy  with  one  older  and 
stronger  than  himself  helps  to  develop  in  him  particular  mus- 
cles, and  the  pluck  and  vigor  of  a  whole  manhood.  When 
at  times  worsted  and  thrown,  the  boy  may  rise  and  say, 
"  You  beat  me  now,  but  I  don't  give  up  the  contest.  Let 
me  get  my  growth,  and  I'll  show  you  what  I  can  do."  The 
effort  by  protection  to  hasten  a  nation's  independence  is  like 
binding  an  infant's  limbs  in  splints,  that  he  may  sooner 
stand  alone.  The  artificial  appliance  may  develop  prema- 
turely a  single  function,  but  it  is  at  a  wasteful  expense  of 
general  vigor,  and  is  quite  sure  to  induce  chronic  weakness 
and  deformity. 


20  INTERNATIONAL   TRADE. 

3.  The  advantages  of  a  home  markat  for  agricultural 
products  are  often  urged  in  favor  of  the  protective  system.  It 
is  certainly  an  advantage  to  a  farmer  to  find,  in  a  manufac- 
turing village  near,  a  market  for  his  produce.  But,  if  this 
market  is  made  and  sustained  for  him  by  a  protective  tariff, 
he  must  pay  for  tools,  for  salt,  for  dry-goods,  for  many  of 
the  manufactured  articles  he  needs,  from  twenty  to  fifty  per 
cent,  more  than  they  would  cost  under  the  rule  of  free  trade. 
This  adds  to  the  cost  of  producing  his  crops,  and  offsets  what 
he  may  save  in  the  expense  of  transportation  to  the  distant 
commercial  city. 

But  here,  as  in  the  first  case,  we  take  issue  directly  on  the 
main  point.  The  assumption  that  protection  creates  the 
home-market  is  a  fallacy.  These  centers  of  varied  industry 
grow  up  naturally  and  healthily  with  the  increase  of  popula- 
tion and  wealth.  Mechanical  genius,  the  investigating  turn 
of  mind,  the  energy  of  will-power,  managing  capacity, — 
these  qualities  come  not  of  protective  tariffs.  They  are  the 
gifts  of  God  ..to-men.  Left  to  themselves,  and  stimulated  by 
competition,  they  spontaneously  lay  hold  on  all  gifts  of  God 
in  nature,  and,  using  all  available  capital,  set  up  the  work- 
shops of  industry,  wherever  best  opportunities  are  presented. 

Furthermore,  the  term  "home  market,"  in  this  discussion, 
has  force  only  as  it  implies  the  production  at  home  of  all 
manufactures  wanted,  and  the  consumption  at  home  of  all 
agricultural  produce  raised, — a  condition  of  things,  attain, 
able,  if  at  all,  only  after  the  lapse  of  centuries.  Meantime  a 
people  must  buy  the  things  they  cannot  produce,  by  selling 
the  surplus  of  that  which  they  can  produce.  For  a  long 
tinie  to  come  this  country  will  have  a  large  surplus  of  bread- 
stuffs,  cotton,  petroleum,  silver,  and  gold,  to  dispose  of.  We 
can  sell  to  others  only  as  we  give  others  a  fair  chance  to  sell 
to  us.  Domestic  commerce  and  foreign  commerce  are  m-< 
sarily  interlocked.  The  prices  of  agricultural  products  in 
our  home  markets  are  determined  by  the  prices  in  markets 


INTERNATIONAL   TRADE.  21 

abroad.  Where  trade  is  freest,  the  prices  will,  on  the  aver- 
age, be  the  best.  Hence,  free  trade  is  the  essential  condition 
of  a  sound  and  healthy  home  market.  Of  all  classes,  those 
devoted  to  agriculture  bear  the  heaviest  share  of  the  burden 
laid  by  the  protective  tariff,  while  they  reap  no  direct  benefit 
from  it. 

There  are  positive  objections  to  the  system  of  protection, 
which  may  be  concisely  stated  as  follows  : — 

1.  Protection  introduces  and  fosters  antagonism  between 
the  different  industries  of  a  country.     The  idea  of  giving 
protection  to  every  branch  of  industry  is  absurd.     The  theory 
implies  special  encouragement  to  certain  manufactures  by 
taxing  all  other  interests  in  their  behalf.     The  duty  which 
protects  the  woolen-manufacture  increases  the  cost  of  the  wool- 
grower's  clothing,  while  the  competition  of  cheap  wools  from 
abroad  keeps  down  the  price  of  his  product.     A  tariff  on  the 
foreign  wools  will  enhance  the  cost  of  material  to  the  manu- 
facturer.    So  two  parties  whose  interests  are  really  one  are 
set  against  each  other. 

2.  The  unnatural  stimulus  given  by  protective  legislation 
leads  to  over-production,  and  consequent  stagnation  and  fail- 
ure.    The  first  effect  of  a  high  duty  is  to  raise  prices,  and 
increase  the  profits  of  the  protected  industry.     This  causes 
a  rush  into  that  branch  of  production,  till  it  is  quickly  over- ' 
done,  and  a  disastrous  re-action  comes. 

3.  Protection  diminishes  the  legitimate  revenues  of  the 
state,  at  the  same  time  that  it  lays  a  heavy  tax  on  the  people. 
Just  so  far  as  the  tariff  is  protective  in  its  operation,  it  re- 
duces the  imposts  from  which  the  government  gets  its  income; 
yet,  just  so  far  as  prices  of  the  protected  article  in   the 
market  are  enhanced   by  the  tariff,   all  consumers  pay  a 
a  special  tax  for  the  benefit  of  the  favored  producer. 

4.  In  its  application,  the  policy  of  protection  must  be 
unstable,    disturbing    the  course   of    industry   by  frequent 
changes.     This  follows  inevitably  from  the  conflict  of  inter- 


22  INTERNATIONAL   TRADE. 

ests  just  referred  to.  When  the  duty  on  iron  is  high,  all 
who  use  iron  as  the  material  of  their  industry  clamor  against 
it.  So  new  candidates  for  the  special  favor  press  their  suit 
for  a  change  of  the  tariff  in  their  interest.  With  every  ses- 
sion of  Congress  movements  are  made  for  some  change  of 
the  tariff.  A  protective  tariff  can  never  be  made  fair  and 
equal  to  all ;  for  its  fundamental  principle  is  an  unjust  favor- 
itism, against  which  those  not  favored  instinctively  protest 
and  contend. 

5.  Protection  tends  to  demoralize  our  national  legislation. 
The  lobby  of  the  Capitol  is  thronged  with  representatives  of 
certain  manufactures,  seeking  to  obtain  or  to  perpetuate  spe- 
cial  protection.      Money  is  freely  used,   and  bargains   are 
made  to  combine  tlfe  friends  of   separate  measures,  when 
votes  are  given.     Proposed  acts  come  thus  to  be  judged  of 
not  by  their  real  merits,  but  by  their  relation  to  personal 
interests. 

6.  f  Protection  tends  to  corrupt  the  public  morals  and  the 
public  service.     It  offers  strong  temptations  to  the  violation 
of  law  by  smuggling.     The  resistance  of  men's  consciences 
to  this  temptation  is  slight,  because  the  tariff -law  rests  on  no 
ground  of   absolute  right.  J  The  nice  sense  of  honor  and 
right  is  deadened  ;  and  the  making  of  false  invoices,   the 
swearing  of  false  oaths,  and  direct  bribery  at  the  custom- 
house, are  regarded  as  venal  sins.     Officials  of  the  govern, 
ment  come  into  collusion  and  partnership  with  these  crimes, 
and  betray  the  sacred   public  trusts  with  which  they  are 
charged. 

Until  within  the  last  half  century,  the  protective  policy 
has  ruled  the  industry  and  trade  of  the  world,  with  only 
here  and  there  an  exception,  like  Holland  in  her  best  days. 
Free  trade  has  had  scarcely  a  chance  to  try  its  experiment. 
Its  principles  are,  "however,  illustrated  and  sustained  in  the 
hundred  years'  history  of  our  nation's  independent  life. 
The  States  of  our  republic,  in  their  extent  of  territory,  their 


INTERNATIONAL   TRADE.  23 

diversity  of  resources,  the  varied  races  and  endowments  of 
their  people,  and  their  distinctive  interests,  constitute  a  world 
by  themselves.  Fortunately  our  Constitution  forever  forbids 
the  protective  policy  to  restrict  their  trade  with  each  other. 
Here  is  a  broad  arena  for  the  experiment  of  free  trade.  For 
nearly  forty  years  the  writer  has  watched  the  course  of  that 
experiment  in  the  unfolding  growth  of  a  young  Western 
State.  Her  chief  industry  was  at  the  first,  and  must  long 
continue  to  be,  agriculture.  But  as  population  poured 
into  the  prairies  and  groves,  and  agriculture  yielded 
a  surplus  of  home  capital,  and  a  basis  of  credit  was  laid 
for  the  introduction  of  Eastern  capital,  every  kind  of  indus- 
try suited  to  her  climate  and  conditions  has  been  successfully 
established.  Her  mines  have  been  worked,  her  water- 
powers  have  been  utilized,  villages  and  cities  have  sprung  up 
suddenly,  and  the  diverse  genius  and  taste  of  her  sons  have 
found  ample  scope  and  stimulus  for  profitable  exercise. 
According  to  the  theory  of  protection,  the  competition  of 
New  England  manufactures,  brought  in  freely  by  the  best 
facilities  for  cheap  and  rapid  transportation,  should  have 
"crushed  out  the  home  production  of  all  but  the  rudest 
and  coarsest  articles  of  manufacture."  But  the  facts  are  all 
against  the  theory.  Woolen  factories,  cotton  factories,  shoe 
factories,  iron  works,  machine  shops,  paper  mills,  establish- 
ments for  making  agricultural  implements,  all  have  been  set 
up  and  carried  on  with  a  success  that  promises  to  be  abiding 
and  expanding.  This  result  of  a  brief  but  fair  experiment 
of  the  principle  of  free  trade  confirms  every  phase  of  that 
doctrine,  and  shows  that  what  is  philosophically  sound  and 
true  is  also  practically  safe  and  wise. 

The  Golden  Rule  of  Christ  is  full  of  wisdom  and  right- 
eousness in  its  application  to  the  intercourse  of  nations.  We 
cherish  the  fond  hope  that  the  day  is  not  distant  when  the 
nations  will  conform  their  policies  to  the  rule,  and  "do  each 
to  others  as  they  would  have  others  do  to  them."  Then  the 


24  INTERNATIONAL   TRADE. 

theory  of  protection,  with  its  false  ideas  of  antagonism  and 
selfish  isolation,  will  have  no  place;  but,  instead,  the  brother- 
hood of  nations  as  well  as  of  individual  men  will  be 
recognized,  and  the  broad  philantrophy  which  Christianity 
inculcates  and  aims  to  make  universal,  will  have  free  scope 
to  work  out  the  world's  emancipation  from  all  wrong  and 
evil.  In  such  a  state,  the  first  principles  of  sound  political 
economy  will  find  their  consummate  application. 


v 


CHAPTER    II. 

MODERN   POLITICAL   ECONOMY. 


ADAM  SMITH,  LL.D.,  F.R.S.,  has  been  properly  called 
the  father  of  Modern  Political  Economy.    His  argu- 
ments have  often  been  repeated,  but  we  will  give  a  few  of 
them : 

OF     RESTRAINTS     UPON     THE    IMPORTATION    FROM    FOREIGN    COUN- 
TRIES   OF    SUCH    GOODS    AS    CAN    BE    PRODUCED    AT    HOME. 

By  restraining,  either  by  high  duties,  or  by  absolute  pro- 
hibitions, the  importation  of  such  goods  from  foreign  coun- 
tries as  can  be  produced  at  home,  the  monopoly  of  the  home 
market  is  more  or  less  secured  to  the  domestic  industry 
employed  in  producing  them.  Thus  the  prohibition  of  im- 
porting either  live  cattle  or  salt  provisions  from  foreign 
countries  secures  to  the  graziers  of  Great  Britain  the  monop- 
oly of  the  home  market  for  butcher's  meat.  The  high 
duties  upon  the  importation  of  corn,  which  in  times  of  mod- 
erate plenty  amount  to  a  prohibition,  give  a  like  advantage 
to  the  growers  of  that  commodity.  The  prohibition  of  the 
importation  of  foreign  woolens  is  equally  favorable  to  the 
woolen  manufacturers.  The  silk  manufacture,  though  alto- 
gether employed  upon  foreign  materials,  has  lately  obtained 
the  same  advantage.  The  linen  manufacture  has  not  yet 
obtained  it,  but  is  making  great  strides  towards  it.  Many 
other  sorts  of  manufacturers  have,  in  the  same  manner, 
obtained  in  Great  Britain,  either  altogether,  or  very  nearly 
a  monopoly  against  their  countrymen.  The  variety  of 
2  (25) 


26  MODERN    POLITICAL   ECONOMY. 

goods  of  which  the  importation  into  Great  Britain  is  pro. 
hibited  either  absolutely,  or  under  certain  circumstances, 
greatly  exceeds  what  can  easily  be  suspected  by  those  who 
are  not  well  acquainted  with  the  laws  of  the  customs.  (Re- 
strictions on  importations  are  now  few.) 

That  this  monopoly  of  the  home  market  frequently  gives 
great  encouragement  to  that  particular  species  of  industry 
which  enjoys  it,  and  frequently  turns  towards  that  employ- 
ment a  greater  share  of  both  the  labor  and  stock  of  the 
society  than  would  otherwise  have  gone  to  it,  cannot  be 
doubted.  But  whether  it  tends  either  to  increase  the  gen- 
eral  industry  of  the  society,  or  to  give  it  the  most  advan- 
tageous direction,  is  not,  perhaps,  altogether  so  evident. 

The  general  industry  of  the  society  can  never  exceed  what 
the  capital  of  the  society  can  employ.  As  the  number  of 
workmen  that  can  be  kept  in  employment  by  any  particular 
person  must  bear  a  certain  proportion  to  his  capital,  so  the 
number  of  those  that  can  be  continually  employed  by  all  the 
members  of  a  great  society,  must  bear  a  certain  proportion 
to  the  whole  capital  of  that  society,  and  can  never  exceed 
that  proportion.  No  regulation  of  commerce  can  increase 
the  quantity  of  industry  in  any  society  beyond  what  its  cap- 
ital can  maintain.  It  can  only  divert  a  part  of  it  into  a 
direction  into  which  it  might  not  otherwise  have  gone;  and 
it  is  by  no  means  certain  that  this  artificial  direction  is  likely 
to  be  more  advantageous  to  the  society  than  that  into  which 
it  would  have  gone  of  its  own  accord. 

Every  individual  is  continually  exerting  himself  to  find 
out  the  most  advantageous  employment  for  whatever  capital 
he  can  command.  It  is  his  own  advantage,  indeed,  and  not 
that  of  the  society,  which  he  has  in  view.  But  the  study  of 
his  own  advantage,  naturally,  or  rather  necessarily,  leads 
him  to  prefer  that  employment  which  is  most  advantageous 
to  the  society. 

I.     Every  individual  endeavors  to  employ  his  capital  as 


MODERN    POLITICAL   ECONOMY.  27 

near  home  as  he  can,  and  consequently  as  much  as  he  can  in 
the  support  of  domestic  industry,  provided  always  that  he 
can  thereby  obtain  the  ordinary,  or  not  a  great  deal  less  than 
the  ordinary,  profits  of  stock. 

Thus,  upon  equal  or  nearly  equal  profits,  every  wholesale  mer  . 
chant  naturally  prefers  the  home  trade  to  the  foreign  trade  of 
consumption,  and  the  foreign  trade  of  consumption  to  the 
carrying  trade.  In  the  home  trade  his  capital  is  never  so  long 
out  of  his  sight  as  it  frequently  is  in  the  foreign  trade  of 
consumption.  He  can  know  better  the  character  and  situa- 
tion of  the  person  whom  he  trusts,  and  if  he  should  happen 
to  be  deceived,  he  knows  better  the  laws  of  the  country  from 
which  he  must  seek  redress.  In  the  carrying  trade,  the 
capital  of  the  merchant  is,  as  it  were,  divided  between  two 
foreign  countries,  and  no  part  of  it  is  ever  necessarily  brought 
home,  or  placed  under  his  own  immediate  view  and  com- 
mand. The  capital  which  an  Amsterdam  merchant  employs 
in  carrying  corn  from  Konigsberg  to  Lisbon,  and  fruit  and 
wine  from  Lisbon  to  Konigsberg,  must  generally  be  the 
one -half  of  it  at  Konigsberg  and  the  other  half  at  Lisbon. 
No  part  of  it  need  ever  come  to  Amsterdam.  The  natural 
residence  of  such  a  merchant  should  either  be  at  Konigsberg  or 
Lisbon,  and  it  can  only  be  some  very  particular  circumstances 
which  can  make  him  prefer  the  residence  of  Amsterdam. 
The  uneasiness,  however,  which  he  feels  at  being  separated 
so  far  from  his  capital,  generally  determines  him  to  bring 
part  both  of  the  Konigsberg  goods  which  he  destines  for  the 
market  of  Lisbon,  and  the  Lisbon  goods  wnich  he  destines 
for  that  of  Konigsberg,  to  Amsterdam;  and  though  this 
necessarily  subjects  him  to  a  double  charge  of  loading  and 
unloading,  as  well  as  to  the  payment  of  some  duties  and 
customs,  yet  for  the  sake  of  having  some  part  of  his  capital 
always  under  his  own  view  and  command,  he  willingly  sub- 
mits to  this  extraordinary  charge;  and  it  is  in  this  manner 
that  every  country  which  has  any  considerable  share  of  the 


28  MODERN    POLITICAL   ECONOMY. 

carrying  trade,  becomes  always  the  emporium,  or  general 
market,  for  the  goods  of  all  the  different  countries  whose 
trade  it  carries  on.  The  merchant,  in  order  to  save  a  second 
loading  and  unloading,  endeavors  always  to  sell  in  the  home 
market  as  much  of  the  goods  of  all  those  different  countries 
as  he  can,  and  thus,  so  far  as  he  can,  to  convert  his  carrying 
trade  into  a  foreign  trade  of  consumption.  A  merchant,  in 
the  same  manner,  who  is  engaged  in  the  foreign  trade  of 
consumption,  when  he  collects  goods  for  foreign  markets, 
will  always  be  glad,  upon  equal  or  nearly  equal  profits,  to 
sell  as  great  part  of  them  at  home  as  he  can.  He  saves  him- 
self  the  risk  and  trouble  of  exportation,  when,  so  far  as 
he  can,  he  thus  converts  his  foreign  trade  of  consumption 
into  a  home  trade.  Home  is  in  this  manner  the  center,  if  I 
may  say  so,  round  which  the  capitals  of  the  inhabitants  of 
every  country  are  continually  circulating,  and  towards  which 
they  are  always  tending,  though  by  particular  causes  they 
may  sometimes  be  driven  off  and  repelled  from  it  towards 
more  distant  employment.  But  a  capital  employed  in  the 
home  trade,  it  has  already  been  shown,  necessarily  puts  into 
motion  a  greater  quantity  of  domestic  industry,  and  gives 
revenue  and  employment  to  a  greater  number  of  the  inhab- 
itants of  the  country,  than  an  equal  capital  employed  in  the 
foreign  trade  of  consumption ;  and  one  employed  in  the 
foreign  trade  of  consumption  has  the  same  advantage  over 
an  equal  capital  employed  in  the  carrying  trade.  Upon 
equal  or  only  nearly  equal  profits,  therefore,  every  individual 
naturally  inclines  to  employ  his  capital  in  the  manner  in 
which  it  is  likely  to  afford  the  greatest  support  to  domestic 
industry,  and  to  give  revenue  and  employment  to  the 
greatest  number  of  people  of  his  own  country. 

II.  Every  individual  who  employs  his  capital  in  the 
support  of  domestic  industry,  necessarily  endeavors  so  to 
direct  that  industry,  that  its  produce  may  be  of  the  greatest 
possible  value. 


MODERN   POLITICAL   ECONOMY.  29 

The  produce  of  industry  is  what  it  adds  to  the  subject  or 
materials  upon  which  it  is  employed.  In  proportion  as  the 
value  of  this  produce  is  great  or  small,  so  will  likewise  be 
the  profits  of  the  employer.  But  it  is  only  for  the  sake  of 
profit  that  any  man  employs  a  capital  in  the  support  of 
industry;  and  he  will  always,  therefore,  endeavor  to  employ 
it  in  the  support  of  that  industry  of  which  the  produce  is 
likely  to  be  of  the  greatest  value,  or  to  exchange  for  the 
greatest  quantity  either  of  money  or  of  other  goods. 

But  the  annual  revenue  of  every  society  is  always  precisely 
equal  to  the  exchangeable  value  of  the  whole  annual  produce 
of  its  industry,  or  rather  is  precisely  the  same  thing  with 
that  exchangeable  value.  As  every  individual,  therefore, 
endeavors  as  much  as  he  can  both  to  employ  his  capital  in 
the  support  of  domestic  industry,  and  so  to  direct  that 
industry  that  its  produce  may 'be  of  the  greatest  value, 
every  individual  necessarily  labors  to  render  the  annual 
revenue  of  the  society  as  great  as  he  can.  He  generally, 
indeed,  neither  intends  to  promote  the  public  interest,  nor 
knows  how  much  he  is  promoting  it.  By  preferring  the 
support  of  domestic  to  that  of  foreign  industry,  he  intends 
only  his  own  security;  and  by  directing  that  industry  in 
such  a  manner  as  its  produce  may  be  of  the  greatest  value, 
he  intends  only  his  own  gain,  and  he  is  in  this,  as  in  many 
other  cases,  led  by  an  invisible  hand  to  promote  an  end 
which  was  no  part  of  his  intention.  Nor  is  it  always  the 
worse  for  the  society  that  it  was  no  part  of  it.  By  pursuing 
his  own  interest  he  frequently  promotes  that  of  the  society 
more  effectually  than  when  he  really  intends  to  promote  it. 
I  have  never  known  much  good  done  by  those  who  affected 
to  trade  for  the  public  good.  It  is  an  affectation,  indeed, 
not  very  common  among  merchants,  and  vary  few  words 
need  be  employed  in  dissuading  them  from  it. 

"What  is  the  species  of  domestic  industry  which  his  capital 
can  employ,  and  of  which  the  produce  is  likely  to  be  of  the 


30  MODERN    POLITICAL   ECONOMY. 

greatest  value,  every  individual,  it  is  evident,  can,  in  this 
local  situation,  judge  much  better  than  any  statesman  or 
lawgiver  can  do  for  him.  The  statesman,  who  should 
attempt  to  direct  private  people  in  what  manner  they  ought 
to  employ  their  capitals,  would  not  only  load  himself  with 
a  most  unnecessary  attention,  but  assume  an  authority  which 
could  safely  be  trusted,  not  only  to  no  single  person,  but  to 
no  council  or  senate  whatever,  and  which  would  nowhere 
be  so  dangerous  as  in  the  hands  of  a  man  who  had  folly  and 
presumption  enough  to  fancy  himself  fit  to  exercise  it. 

To  give  the  monopoly  of  the  home  market  to  the  produce 
of  domestic  industry,  in  any  particular  art  or  manufacture, 
is  in  some  measure  to  direct  private  people  in  what  manner 
they  ought  to  employ  their  capitals,  and  must,  in  almost  all 
cases,  be  either  a  useless  or  a  hurtful  regulation.  If  the 
produce  of  domestic  can  be  brought  there  as  cheap  as  that 
of  foreign  industry,  the  regulation  is  evidently  useless.  If 
it  cannot,  it  must  generally  be  hurtful.  It  is  the  maxim  of 
every  prudent  master  of  a  family,  never  to  attempt  to  make 
at  home  what  it  wrill  cost  him  more  to  make  than  to  buy. 
The  tailor  does  not  attempt  to  make  his  own  shoes,  but  buys 
them  of  the  shoemaker.  The  shoemaker  does  not  attempt 
to  make  his  own  clothes,  but  employs  a  tailor.  The  farmer 
attempts  to  make  neither  the  one  nor  the  other,  but  employs 
those  different  artificers.  All  of  them  find  it  for  their 
interest  to  employ  their  whole  industry  in  a  way  in  which 
they  have  some  advantage  over  their  neighbors,  and  to 
purchase  with  a  part  of  its  produce,  or  what  is  the  same 
thing,  with  the  price  of  a  part  of  it,  whatever  else  they  have 
occasion  for. 

What  is  prudence  in  the  conduct  of  every  private  family, 
can  scarce  be  folly  in  that  of  a  great  kingdom.  If  a  foreign 
country  can  supply  us  with  a  commodity  cheaper  than  we 
ourselves  can  make  it,  better  buy  it  of  them  with  some  part 
of  the  produce  of  our  own  industry,  employed  in  a  way  in 


MODERN    POLITICAL   ECONOMY.  31 

which  we  have  some  advantage.  The  general  industry  of 
the  country,  being  always  in  proportion  to  the  capital  which 
employs  it,  will  not  thereby  be  diminished,  no  more  than 
that  of  the  above-mentioned  artificers  ;  but  only  left  to  find 
out  the  way  in  which  it  can  be  employed  with  the  greatest 
advantage.  It  is  certainly  not  employed  to  the  greatest 
advantage  when  it  is  thus  directed  towards  an  object  which 
it  can  buy  cheaper  than  it  can  make.  The  value  of  its 
annual  produce  is  certainly  more  or  less  diminished,  when  it 
is  thus  turned  away  from  producing  commodities  evidently 
of  more  value  than  the  commodity  which  it  is  directed  to 
produce.  According  to  the  supposition,  that  commodity 
could  be  purchased  from  foreign  countries  cheaper  than  it 
can  be  made  at  home.  It  could,  therefore,  have  been  pur- 
chased with  a  part  only  of  the  commodities,  or,  what  is  the 
same  thing,  with  a  part  only  of  the  price  of  the  commodities, 
which  the  industries  employed  by  an  equal  capital  would 
have  produced  at  home,  had  it  been  left  to  follow  its  natural 
course.  The  industry  of  the  country,  therefore,  is  thus 
turned  away  from  a  more,  to  a  less  advantageous  employ- 
ment, and  the  exchangeable  value  of  its  annual  produce, 
instead  of  being  increased,  according  to  the  intention  of  the 
lawgiver,  must  necessarily  be  diminished  by  every  such 
regulation. 

By  means  of  such  regulations,  indeed,  a  particular 
manufacture  may  sometimes  be  acquired  sooner  than  it 
could  have  been  otherwise,  and  after  a  certain  time  may  be 
made  at  home  as  cheap  or  cheaper  than  in  the  foreign 
country.  But  though  the  industry  of  the  society  may  be 
thus  carried  with  advantage  into  a  particular  channel  sooner 
than  it  could  have  been  otherwise,  it  will  by  no  means 
follow  that  the  sum  total,  either  of  its  industry,  or  of  its 
revenue,  can  ever  be  augmented  by  any  such  regulation. 
The  industry  of  the  society  can  augment  only  in  proportion 
as  its  capital  augments,  and  its  capital  can  augment  only  in 


32  MODERN    POLITICAL   ECONOMY. 

proportion  to  what  can  be  gradually  saved  out  of  its  revenue. 
But  the  immediate  effect  of  every  such  regulation  is  to 
diminish  its  revenue,  and  what  diminishes  its  revenue  is 
certainly  not  very  likely  to  augment  its  capital  faster  than 
it  would  have  augmented  of  its  own  accord,  had  both  their 
capital  and  their  industry  been  left  to  find  out  their  natural 
employments. 

Though  for  want  of  such  regulations  the  society  should 
never  acquire  the  proposed  manufacture,  it  would  not,  upon 
that  account,  necessarily  be  the  poorer  in  any  one  period  of 
its  duration.  In  every  period  of  its  duration  its  whole 
capital  and  industry  might  still  have  been  employed,  though 
upon  different  objects,  in  the  manner  that  was  most  advan- 
tageous at  the  time.  In  every  period  its  revenue  might 
have  been  the  greatest  which  its  capital  could  afford,  and 
both  capital  and  revenue  might  have  been  augmented  with 
the  greatest  possible  rapidity. 

The  natural  advantages  which  one  country  has  over 
another  in  producing  particular  commodities  are  sometimes 
so  great,  that  it  is  acknowledged  by  all  the  world  to  be  in 
vain  to  struggle  with  them.  By  means  of  glasses,  hotbeds, 
and  hot-walls,  very  good  grapes  can  be  raised  in  Scotland, 
and  very  good  wine,  too,  can  be  made  of  them  at  about 
thirty  times  the  expense  for  which  at  least  equally  good 
can  be  brought  from  foreign  countries.  Would  it  be  a 
reasonable  law  to  prohibit  the  importation  of  all  foreign 
wines  merely  to  encourage  the  making  of  claret  and  bur- 
gundy  in  Scotland  ?  But  if  there  would  be  a  manifest 
absurdity  in  turning  towards  any  employment,  thirty  times 
more  of  the  capital  and  industry  of  the  country  than  would 
be  necessary  to  purchase  from  foreign  countries  an  equal 
quantity  of  the  commodities  wanted,  there  must  be  an 
absurdity,  though  not  altogether  so  glaring,  yet  exactly  of 
the  same  kind,  in  turning  toward  any  such  employment  a 
thirtieth,  or  even  a  three  hundredth  part  more  of  either. 


MODERN    POLITICAL   ECONOMY.  33 

Whether  the  advantages  which  one  country  has  over  another 
be  natural  or  acquired,  is  in  this  respect  of  no  consequence. 
As  long  as  the  one  country  has  those  advantages,  and  the 
other  wants  them,  it  will  always  be  more  advantageous  for 
the  latter  rather  to  buy  of  the  former  than  to  make.  It  is 
an  acquired  advantage  only  which  one  artificer  has  over  his 
neighbor  who  exercises  another  trade;  and  yet  they  both 
find  it  more  advantageous  to  buy  of  one  another,  than  to 
make  what  does  not  belong  to  their  particular  trades. 

Merchants  and  manufacturers  are  the  people  who  derive 
the  greatest  advantage  from  this  monopoly  of  the  home 
market.  The  prohibition  of  the  importation  of  foreign 
cattle,  and  of  salt  provisions,  together  with  the  high  duties 
upon  foreign  corn,  which  in  times  of  moderate  plenty 
amount  to  a  prohibition,  are  not  near  so  advantageous  to 
the  graziers  and  farmers  of  Great  Britain,  as  other  regula- 
tions of  the  same  kind  are  to  its  merchants  and  manufac- 
turers. Manufactures,  those  of  the  finer  kind  especially, 
are  more  easily  transported  from  one  country  to  another 
than  corn  or  cattle.  It  is  in  the  fetching  and  carrying 
manufactures,  accordingly,  that  foreign  trade  is  chiefly 
employed.  In  manufactures,  a  very  small  advantage  will 
enable  foreigners  to  undersell  our  own  workmen,  even  in 
the  home  market.  It  will  require  a  very  great  one  to  enable 
them  to  do  so  in  the  rude  produce  of  the  soil.  If  the  free 
importation  of  foreign  manufactures  were  permitted,  several 
of  the  home  manufactures  would  probably  suffer,  and  some 
of  them,  perhaps,  go  to  ruin  altogether,  and  a  considerable 
part  of  the  stock  and  industry  at  present  employed  in  them 
would  be  forced  to  find  out  some  other  employment.  But 
the  freest  importation  of  the  rude  produce  of  the  soil  could 
have  no  such  effect  upon  the  agriculture  of  the  country. 

Country  gentlemen  and  farmers  are,  to  their  great  honor, 

of  all  people,   the  least  subject  to  the  wretched  spirit  of 

monopoly.     The  undertaker  of^r«¥e86t««fta^ufactory  is  some- 

2* 

If    ~  OF   THE 

((  U.NIVEKSITY 


34  MODERN   POLITICAL   ECONOMY. 

times  alarmed  if  another  work  of  the  same  kind  is  estab- 
lished within  twenty  miles  of  him.     The  Dutch  undertaker 
of  the  woolen  manufacture  at  Abbeville  stipulated  that  no 
work  of  the  same  kind  should  be  established  within  thirty 
leagues  of  that  city.     Farmers  and  country  gentlemen,  on 
the  contrary,  are  generally  disposed  rather  to  promote  than 
to  obstruct  the  cultivation  and  improvement  of  their  neigh- 
bors' farms  and  estates.     They  have  no  secrets,  such  as  those 
of   the  greater  part  of   manufacturers,   but  are   generally 
rather  fond  of  communicating  to  their  neighbors,   and  of 
extending  as  far  as  possible,  any  new  practice  which  they 
have  found  to  be  advantageous.     Pius  Questus,  says  old  Cato, 
stabilis-simusque,  minimeque  invidiosus  ;  minimeque  male  cogi- 
tantes,  sunt,  qui  in  eo  studio  occupati  sunt.     Country  gentle- 
men and  farmers,  dispersed  in  different  parts  of  the  country, 
cannot  so  easily  combine  as  merchants  and  manufacturers, 
who  being  collected  into  towns,   and  accustomed  to   that 
exclusive  corporation  spirit  which  prevails  in  them,  naturally 
endeavor  to  obtain  against  all  their  countrymen  the  same 
exclusive  privilege  which  they  generally  possess  against  the 
inhabitants   of    their   respective  towns.     They  accordingly 
seem  to  have  been  the  original  inventors  of  those  restraints 
upon  the  importation  of  foreign  goods,  which  secure  to  them 
the  monopoly  of    the  home  market.     It  was  probably  in 
imitation  of  them,  and  to  put  themselves  upon  a  level  with 
those  who,  they  found,  were  disposed  to  oppress  them,  that 
the  country  gentlemen  and  farmers  of  Great  Britain  so  far 
forgot  the  generosity  which  is  natural  to  their  station,  as  to 
demand  the  exclusive  privilege  of  supplying  their  country- 
men with  corn  and  butcher's-meat.     They  did  not  perhaps 
take  time  to  consider,  how  much  less  their  interest  could  be 
affected  by  the  freedom  of  trade,  than  that  of  the  people 
whose  example  they  followed. 

To  prohibit  by  a  perpetual  law  the  importation  of  foreign 
corn  and  cattle,  is  in  reality  to  enact,  that  the  population  and 


MODERN   POLITICAL   ECONOMY.  35 

industry  of  the  country  shall  at  no  time  exceed  what  the 
rude  produce  of  its  own  soil  can  maintain. 

There  seems,  however,  to  be  two  cases  in  which  it  will 
generally  be  advantageous  to  lay  some  burden  upon  foreign, 
for  the  encouragement  of  domestic  industry. 

The  first  is,  when  some  particular  sort  of  industry  is 
necessary  for  the  defense  of  the  country.  The  defense  of 
Great  Britain,  for  example,  depends  very  much  upon  the 
number  of  its  sailors  and  shipping.  The  act  of  navigation, 
therefore,  very  properly  endeavors  to  give  the  sailors  and 
shipping  of  Great  Britain  the  monopoly  of  the  trade  of 
their  own  country,  in  some  cases,  by  absolute  prohibitions, 
and  in  others  by  heavy  burdens  upon  the  shipping  of  foreign 
countries. 

SMITH    ON    THE    ADVANTAGE    OF    PROTECTION. 

The  second  case  in  which  it  will  generally  be  advantageous 
to  lay  some  burden  upon  foreign,  for  the  encouragement  of 
domestic  industry,  is  when  some  tax  is  imposed  at  home  upon 
the  produce  of  the  latter.  In  this  case,  it  seems  reasonable 
that  an  equal  tax  should  be  imposed  upon  the  like  produce  of 
the  former.  This  would  not  give  the  monopoly  of  the  home 
market  to  domestic  industry,  nor  turn  towards  a  particular 
employment  a  greater  share  of  the  stock  and  labor  of  the  coun- 
try than  what  would  naturally  go  to  it.  It  would  only  hinder 
any  part  of  what  would  naturally  go  to  it  from  being  turned 
away  by  the  tax,  into  a  less  natural  direction,  and  would 
leave  the  competition  between  foreign  and  domestic  industry, 
after  the  tax,  as  nearly  as  possible  upon  the  same  footing  as 
before  it.  In  Great  Britain,  when  any  such  tax  is  laid  upon 
the  produce  of  domestic  industry,  it  is  usual  at  the  same 
time,  in  order  to  stop  the  clamorous  complaints  of  our  mer- 
chants and  manufacturers,  that  they  will  be  undersold  at 
home,  to  lay  a  much  heavier  duty  upon  the  importation  of  all 
foreign  goods  of  the  same  kind. 


36  MODERN   POLITICAL   ECONOMY. 

Such  taxes  when  they  have  grown  up  to  a  certain  height, 
are  a  curse  equal  to  the  barrenness  of  the  earth  and  the 
inclemency  of  the  heavens;  and  yet  it  is  in  the  richest  and 
most  industrious  countries  that  they  have  been  most  gener- 
ally imposed.  No  other  countries  could  support  so  great  a 
disorder.  As  the  strongest  bodies  only  can  live  and  enjoy 
health,  under  an  unwholesome  regimen,  so  the  nations  only, 
that  in  every  sort  of  industry  have  the  greatest  natural  and 
acquired  advantages,  can  subsist  and  prosper  under  such 
taxes.  Holland  is  the  country  in  Europe  in  which  they 
abound  most,  and  which  from  peculiar  circumstances  con- 
tinues to  prosper,  not  by  means  of  them,  as  has  been  most 
absurdly  supposed,  but  in  spite  of  them. 

As  there  are  two  cases  in  which  it  will  generally  be  advan- 
tageous to  lay  some  burden  upon  foreign,  for  the  encourage- 
ment of  domestic  industry,  so  there  are  two  others  in  which 
it  may  sometimes  be  a  matter  of  deliberation;  in  the  one,  how 
far  it  is  proper  to  continue  the  free  importation  of  certain  for- 
eign goods;  and  in  the  other,  how  far,  or  in  what  manner,  it 
may  be  proper  to  restore  that  free  importation  after  it  lias 
been  for  some  time  interrupted. 

The  case  in  which  it  may  sometimes  be  a  matter  of  delib- 
eration how  far  it  is  proper  to  continue  the  free  importation 
of  certain  foreign  goods,  is,  when  some  foreign  nation 
restrains  by  high  duties  or  prohibitions  the  importation  of 
some  of  our  manufactures  into  their  country.  Revenge  in 
this  case  naturally  dictates  retaliation,  and  that  we  should 
impose  the  like  duties  and  prohibitions  upon  the  importation 
of  some  or  all  of  their  manufactures  into  ours.  Nations 
accordingly  seldom  fail  to  retaliate  in  this  manner.  The 
French  have  been  particularly  forward  to  favor  their  own 
manufactures  by  restraining  the  importation  of  such  foreign 
goods  as  could  come  into  competition  with  them.  In  this 
consisted  a  great  part  of  the  policy  of  Mr.  Colbert,  who,  not- 
withstanding his  great  abilities,  seems  in  this  case  to  have 


MODERN    POLITICAL   ECONOMY.  37 

been  imposed  upon  by  the  sophistry  of  merchants  and  man 
ufacturers,  who  are  always  demanding  a  monopoly  against 
their  countrymen.  It  is  at  present  the  opinion  of  the  most 
intelligent  men  in  France  that  his  operations  of  this  kind  have 
not  been  beneficial  to  his  country.  That  minister,  by  the 
tariff  of  1667,  imposed  very  high  duties  upon  a  great  num- 
ber of  foreign  manufactures.  Upon  his  refusing  to  moderate 
them  in  favor  of  the  Dutch,  they  in  1671  prohibited  the 
importation  of  the  wines,  brandies,  and  manufactures  of 
France.  The  war  of  1672  seems  to  have  been  in  part  occa- 
sioned by  this  commercial  dispute.  The  peace  of  Nimeguen 
put  an  end  to  it  in  1678,  by  moderating  some  of  those  duties 
in  favor  of  the  Dutch,  who  in  consequence  took  off  their  pro- 
hibition.  It  was  about  the  same  time  that  the  French  and 
English  began  mutually  to  oppress  each  other's  industry,  by 
the  like  duties  and  prohibitions,  of  which  the  French,  how- 
ever, seem  to  have  set  the  first  example.  The  spirit  of  hos- 
tility which  has  subsisted  between  the  two  nations  ever  since, 
has  hitherto  hindered  them  from  being  moderated  on  either 
side.  In  1697  the  English  prohibited  the  importation  of 
bonelace,  the  manufacture  of  Flanders.  The  government  of 
that  country,  at  that  time  under  the  dominion  of  Spain,  pro- 
hibited  in  return  the  importations  of  English  woolens.  In 
1700,  the  prohibition  of  importing  bonelace  into  England 
was  taken  off  upon  condition  that  the  importations  of  the 
English  woolens  into  Flanders  should  be  put  on  the  same 
footing  as  before. 

There  may  be  a  good  policy  in  retaliations  of  this  kind, 
when  there  is  a  probability  that  they  will  procure  the  repeal 
of  the  high  duties  or  prohibitions  complained  of.  The 
recovery  of  a  great  foreign  market  will  generally  more  than 
compensate  the  transitory  inconveniency  of  paying  dearer 
during  a  short  time  for  some  sort  of  goods.  To  judge 
whether  such  retaliations  are  likely  to  produce  such  an  eif  ect, 
does  not,  perhaps,  belong  so  much  to  the  science  of  a  legis- 


38  MODERN   POLITICAL   ECONOMY. 

lator,  whose  deliberations  ought  to  be  governed  by  general 
principles  which  are  always  the  same,  as  to  the  skill  of  that 
insidious  and  crafty  animal,  vulgarly  called  a  statesman  or 
politician,  whose  councils  are  directed  by  the  momentary 
fluctuations  of  affairs.  When  there  is  no  probability  that 
any  such  repeal  can  be  procured,  it  seems  a  bad  method  of 
compensating  the  injury  done  to  certain  classes  of  our  people, 
to  do  another  injury  ourselves,  not  only  to  those  classes,  but 
to  almost  all  the  other  classes  of  them.  When  our  neighbors 
prohibit  some  manufacture  of  ours,  we  generally  prohibit, 
not  only  the  same,  for  that  alone  would  seldom  affect  them 
considerably,  but  some  other  manufacture  of  theirs.  This 
may  no  doubt  give  encouragement  to  some  particular  class 
of  workmen  among  ourselves,  and  by  excluding  some  of  their 
rivals,  may  enable  them  to  raise  their  price  in  the  home  mar- 
ket. Those  workmen,  however,  who  suffered  by  our  neigh- 
bor's prohibition  will  not  be  benefited  by  ours.  On  the 
contrary,  they  and  almost  all  the  other  classes  of  our  citizens 
will  thereby  be  obliged  to  pay  dearer  than  before  for  cer- 
tain goods.  Every  such  law,  therefore,  imposes  a  real  tax 
upon  the  whole  country,  not  in  favor  of  that  particular  class 
of  workmen  who  were  injured  by  our  neighbors'  prohibi- 
tion, but  of  some  other  class. 

The  case  in  which  it  may  sometimes  be  a  matter  of  delib- 
eration, how  far,  or  in  what  manner  it  is  proper  to  restore 
the  free  importation  of  foreign  goods,  after  it  has  been  for 
some  time  interrupted,  is,  when  particular  manufactures,  by 
means  of  high  duties  or  prohibitions  upon  all  foreign  goods 
which  can  come  into  competition  with  them,  have  been  so 
far  extended  as  to  employ  a  great  multitude  of  hands. 
Humanity  may  in  this  case  require  that  the  freedom  of  trade 
should  be  restored  only  by  slow  gradations,  and  with  a  good 
deal  of  reserve  and  circumspection.  Were  those  high  duties 
and  prohibitions  taken  away  all  at  once,  cheaper  foreign  goods 
of  the  same  kind  might  be  poured  so  fast  into  the  home  mar- 


MODERN    POLITICAL   ECONOMY.  39 

ket,  as  to  deprive  all  at  once  many  thousands  of  our  people 
of  their  ordinary  employment  and  means  of  subsistence. 
The  disorder  which  this  would  occasion  might  no  doubt  be 
very  considerable.  It  would  in  all  probability,  however,  be 
much  less  than  is  commonly  imagined,  for  the  two  following 
reasons: 

First,  all  those  manufactures,  of  which  any  part  is  com- 
monly exported  to  other  European  countries  without  a 
bounty,  could  be  very  little  affected  by  the  freest  importa- 
tion of  foreign  goods.  Such  manufactures  must  be  sold  as 
cheap  abroad  as  any  other  foreign  goods  of  the  same  quality 
and  kind,  and  consequently  must  be  sold  cheaper  at  home. 
They  would  still,  therefore,  keep  possession  of  the  home 
market,  and  though  a  capricious  man  of  fashion  might  some- 
times prefer  foreign  wares,  merely  because  they  were  foreign, 
to  cheaper  and  better  goods  of  the  same  kind  that  were 
made  at  home,  this  folly  could,  from  the  nature  of  things, 
extend  to  so  few,  that  it  could  make  no  sensible  impression 
upon  the  general  employment  of  the  people.  But  a  great 
part  of  all  the  different  branches  of  our  woolen  manufac- 
ture, of  our  tanned  leather,  and  of  our  hardware,  are 
annually  exported  to  other  European  countries  without  any 
bounty,  and  these  are  the  manufactures  which  employ  the 
greatest  number  of  hands.  The  silk,  perhaps,  is  the  manu- 
facture which  would  suffer  the  most  by  this  freedom  of 
trade,  and  after  it  the  linen,  though  the  latter  much  less 
than  the  former. 

Secondly,  though  a  great  number  of  people  should,  by 
thus  restoring  the  freedom  of  trade,  be  thrown  all  at  once 
out  of  their  ordinary  employment  and  common  method  of 
subsistence,  it  would  by  no  means  follow  that  they  would 
thereby  be  deprived  either  of  employment  or  subsistence. 
By  the  reduction  of  the  army  and  navy  at  the  end  of  the 
late  war,  more  than  a  hundred  thousand  soldiers  and  sea- 
men, a  number  equal  to  what  is  employed  in  the  greatest 


40  MODERN   POLITICAL   ECONOMY. 

manufactures,  were  all  at  once  thrown  out  of  their  ordinary 
employment;  but,  though  they  no  doubt  suffered  some  in- 
conveniency,  they  were  not  thereby  deprived  of  all  employ- 
ment and  subsistence.  The  greater  part  of  the  seamen,  it  is 
probable,  gradually  betook  themselves  to  the  merchant- 
service  as  they  could  find  occasion,  and  in  the  meantime  both 
they  and  the  soldiers  were  absorbed  in  the  great  mass  of  the 
people,  and  employed  in  a  great  variety  of  occupations. 
Not  only  no  great  convulsion,  but  no  sensible  disorder  arose 
from  so  great  a  change  in  the  situation  of  more  than  a 
hundred  thousand  men,  all  accustomed  to  the  use  of  arms, 
and  many  of  them  to  rapine  and  plunder.  The  number  of 
vagrants  was  scarce  anywhere  sensibly  increased  by  it,  even 
the  wages  of  labor  were  not  reduced  by  it  in  any  occupa- 
tion, so  far  as  I  have  been  able  to  learn,  except  in  that  of 
seamen  in  the  merchant-service.  But  if  we  compare  together 
the  habits  of  a  soldier  and  of  any  sort  of  manufacturer,  we 
shall  find  that  those  of  the  latter  do  not  tend  so  much  to 
disqualify  him  from  being  employed  in  a  new  trade,  as  those 
of  the  former  from  being  employed  in  any.  The  manufac- 
turer has  always  been  accustomed  to  look  for  his  subsistence 
from  his  labor  only;  the  soldier  to  expect  it  from  his  pay. 
Applications  and  industry  have  been  familiar  to  the  one; 
idleness  and  dissipation  to  the  other.  But  it  is  surely  much 
easier  to  change  the  direction  of  industry  from  one  sort  of 
labor  to  another,  than  to  turn  idleness  and  dissipation,  to 
any.  To  the  greater  part  of  manufactures  besides,  it  has 
already  been  observed,  there  are  other  collateral  manufac- 
tures of  so  similar  a  nature,  that  a  workman  can  easily 
transfer  his  industry  from  one  of  them  to  another.  The 
greater  part  of  such  workmen  too  are  occasionally  employed 
in  country  labor.  The  stock  which  employed  them  in  a 
particular  manufacture  before,  will  still  remain  in  the  country 
to  employ  an  equal  number  of  people  in  some  other  way. 
The  capital  of  the  country  remaining  the  same,  the  demand 


MODERN   POLITICAL   ECONOMY.  41 

for  labor  will  likewise  be  the  same,  or  very  nearly  the  same, 
though  it  may  be  exerted  in  different  places  and  for  differ- 
ent occupations.  Soldiers  and  seamen,  indeed,  when  dis- 
charged from  the  king's  service,  are  at  liberty  to  exercise 
any  trade,  within  any  town  or  place  of  Great  Britain  or 
Ireland.  Let  the  same  natural  liberty  of  exercising  what 
species  of  industry  they  please,  be  restored  to  all  His 
Majesty's  subjects,  in  the  same  manner  as  to  soldiers  and 
seamen;  that  is,  break  down  the  exclusive  privileges  of 
corporations,  and  repeal  the  statute  of  apprenticeship,  both 
which  are  real  encroachments  upon  natural  liberty,  and  add 
to  these  the  repeal  of  the  law  of  settlements,  so  that  a  poor 
workman,  when  thrown  out  of  employment  either  in  one 
trade,  or  in  one  place,  may  seek  for  it  in  another  trade  or  in 
another  place,  without  the  fear  either  of  a  prosecution  or  of 
a  removal,  and  neither  the  public  nor  the  individuals  will 
suffer  much  more  from  the  occasional  disbanding  some 
particular  classes  of  manufacturers,  than  from  that  of  sol- 
diers. Our  manufacturers  have  no  doubt  great  merit  with 
their  country,  but  they  cannot  have  more  than  those  who 
defend  it  with  their  blood,  nor  deserve  to  be  treated  with 
more  delicacy. 

To  expect,  indeed,  that  the  freedom  of  trade  should  ever 
be  entirely  restored  in  Great  Britain,  is  as  absurd  as  to 
expect  that  an  Oceania  or  Utopia  should  ever  be  established 
in  it.  Not  only  the  prejudices  of  the  public,  but  what  is 
much  more  unconquerable,  the  private  interests  of  many 
individuals,  irresistibly  oppose  it.  Were  the  officers  of  the 
army  to  oppose  with  the  same  zeal  and  unanimity  any  reduc- 
tion in  the  number  of  forces,  with  which  master  manufac- 
turers set  themselves  against  every  law  that  is  likely  to 
increase  the  number  of  their  rivals  in  the  home  market: 
were  the  former  to  animate  the  soldiers,  in  the  same  manner 
as  the  latter  enflame  their  workmen,  to  attack  with  violence 
and  outrage  the  proposers  of  any  such  regulation, — to 


42  MODEEN   POLITICAL   ECONOMY. 

attempt  to  reduce  the  army  would  be  as  dangerous  as  it  has 
now  become  to  attempt  to  diminish  in  any  respect  the 
monopoly  which  our  manufacturers  have  obtained  against 
us.  This  monopoly  has  so  much  increased  the  number  of 
some  particular  tribes  of  them  that,  like  an  overgrown 
standing  army,  they  have  become  formidable  to  the  govern- 
ment, and  upon  many  occasions  intimidate  the  legislature. 
The  member  of  parliament  who  supports  every  proposal  for 
strengthening  this  monopoly,  is  sure  to  acquire  not  only  the 
reputation  of  understanding  trade,  but  great  popularity  and 
influence  with  an  order  of  men  whose  numbers  and  wealth 
render  them  of  great  importance.  If  he  opposes  them,  on 
the  contrary,  and  still  more  if  he  has  authority  enough  to 
be  able  to  thwart  them,  neither  the  most  acknowledged 
probity,  nor  the  highest  rank,  nor  the  greatest  public  ser- 
vices, can  protect  him  from  the  most  infamous  abuse  and 
'detraction,  from  personal  insults,  nor  sometimes  from  real 
danger,  arising  from  the  insolent  outrage  of  furious  and 
disappointed  monopolists. 

The  undertaker  of  a  great  manufacture,  who,  by  the 
home  markets  being  suddenly  laid  open  to  the  competition 
of  foreigners,  should  be  obliged  to  abandon  his  trade,  would 
no  doubt  suffer  very  considerably.  That  part  of  his  capital 
which  had  usually  been  employed  in  purchasing  materials 
and  in  paying  his  workmen  might,  without  much  difficulty 
perhaps,  find  another  employment.  But  that  part  of  it 
which  was  fixed  in  work-houses,  and  in  the  instruments  of 
trade,  could  scarce  be  disposed  of  without  considerable  loss. 
The  equitable  regard,  therefore,  to  his  interest  requires  that 
changes  of  this  kind  should  never  be  introduced  suddenly, 
but  slowly,  gradually,  and  after  a  very  long  warning.  The 
legislature,  were  it  possible  that  its  deliberations  could  bo 
always  directed,  not  by  the  clamorous  importunity  of  partial 
interests,  but  by  an  extensive  view  of  the  general  good, 
ought  upon  this  very  account,  perhaps,  to  be  particularly 


MODERN    POLITICAL   ECONOMY.  43 

careful  neither  to  establish  any  new  monopolies  of  this 
kind,  nor  to  extend  further  those  which  are  already  estab- 
lished. Every  such  legislation  introduces  some  degree  of 
real  disorder  into  the  constitution  of  the  state,  which  it  will 
be  difficult  afterwards  to  cure  without  occasioning  another 
disorder. 

How  far  it  may  be  proper  to  impose  taxes  upon  the  im- 
portation of  foreign  goods,  in  order,  not  to  prevent  their 
importation,  but  to  raise  a  revenue  for  government,  I  shall 
consider  hereafter  when  I  come  to  treat  of  taxes.  Taxes 
imposed  with  a  view  to  prevent,  or  even  to  diminish  impor- 
tation, are  evidently  as  destructive  of  the  revenue  of  the 
customs  as  of  the  freedom  of  trade. 


CHAPTER  III. 

EFFECTS  OF   REGULATIONS  PRESCRIBING  THE 
NATURE   OF   PRODUCTS. 

BY  JEAN-BAPTISTE  SAY. 


BLANQUI,  in  his  History  of  Political  Economy,  says: 
"  Adam  Smith  had  thrown  much  light  on  the  theory 
of  banks,  division  of  labor,  and  the  foundation  of  the  value 
of  things;  he  had  made  virtual  discoveries,  but  he  had  not 
lived  long  enough  to  observe  their  applications.  It  was  on 
after  his  death  that  people  could  judge  of  the  effects  of 
unlimited  competition  of  which  he  was  one  of  the  first 
apostles,  and  the  complicated  pauperism  of  our  days  had  not 
disturbed  the  serenity  of  those  in  which  he  lived.  Political 
Economy  was  only  the  science  of  the  production  of  wealth. 
It  was  reserved  for  a  Frenchman  (Jean-Baptiste  Say),  to 
complete  the  work  and  initiate  us  into  the  mysteries  of  the 
distribution  of  the  profits  of  the  labor  at  the  same  time  that 
ne  made  known  to  us  the  so  varied  phenomena  of  the  con- 
sumption  of  products.'1 

The  natural  wants  of  society  and  its  circumstances  for  the 
time  being,  occasion  a  more  or  less  lively  demand  for  par- 
ticular kinds  of  products.  Consequently,  in  these  branches 
of  production,  productive  services  are  somewhat  better  paid 
than  in  the  rest;  that  is  to  say,  the  profits  upon  land,  capital, 
and  labor,  devoted  to  those  branches  of  production,  are 
some  somewhat  larger.  This  additional  profit  naturally 
attracts  producers,  and  thus  the  nature  of  the  products  is 
always  regulated  by  the  wants  of  society. 

(44) 


NATURE   OF   PRODUCTS.  45 

"When  authority  throws  itself  in  the  way  of  this  natural 
course  of  things,  and  says,  the  product  you  are  about  to 
create,  that  which  yields  the  greatest  profits,  and  is  conse- 
quently the  most  in  request,  is  by  no  means  the  most  suitable 
to  your  circumstances,  you  must  undertake  some  other,  it 
evidently  directs  a  portion  of  the  productive  energies  of  the 
nation  towards  an  object  of  less  desire,  at  the  expense  of 
another  of  more  urgent  desire. 

In  France,  about  the  year  1794,  there  were  some  persons 
persecuted,  and  even  brought  to  the  scaffold,  for  having  con- 
verted corn  land  into  pasturage.  Yet  the  moment  these 
iinhappy  people  found  it  more  profitable  to  feed  cattle  than 
to  grow  corn,  one  might  have  been  sure  that  society  stood 
more  in  need  of  cattle  than  of  corn,  and  that  greater  value 
could  be  produced  in  one  way  than  in  the  other. 

But,  said  the  public  authorities,  the  value  produced  is  of 
less  importance  than  the  nature  of  the  product,  and  we  would 
rather  have  you  raise  ten  dollars  worth  of  grain  than  twenty 
dollars  worth  of  butcher's  meat.  In  this  they  betrayed  their 
ignorance  of  this  simple  truth,  that  the  greatest  product  is 
always  the  best;  and  that  an  estate,  which  should  produce 
in  butcher's  meat  wherewith  to  purchase  twice  as  much 
wheat  as  could  have  been  raised  upon  it,  produces,  in  reality, 
twice  as  much  wheat  as  if  it  had  been  sowed  with  grain ;  since 
wheat  to  twice  the  amount  is  to  be  got  for  its  product.  This 
way  of  getting  wheat,  they  will  say  to  you,  does  not  increase 
its  total  quantity.  True,  unless  it  be  introduced  from  abroad ; 
but  nevertheless,  this  article  must  at  the  time  be  relatively 
more  plentiful  than  butcher's  meat,  because  the  product  of 
two  acres  of  wheat  is  given  for  that  of  one  of  pasture.* 
And,  if  wheat  be  sufficiently  scarce,  and  in  sufficient  request 

*  At  the  disastrous  period  in  question,  there  was  no  actual  want  of  wheat;  the 
growers  merely  felt  a  disinclination  to  sell  for  paper  money.  Wheat  was  sold  for 
real  value  at  a  very  reasonable  rate;  and,  though  a  hundred  thousand  acres  of 
pasture  land  had  been  converted  into  arable,  the  disinclination  to  exchange  wheat 
for  a  discredited  paper  money  would  not  have  been  a  iot  reduced. 


46  EFFECTS   OF   REGULATIONS 

to  make  tillage  more  profitable  than  grazing,  legislative 
interference  is  superfluous  altogether;  for  self-interest  will 
make  the  producer  turn  his  attention  to  the  former. 

The  only  question  then  is,  which  is  the  most  likely  to  know 
what  kind  of  cultivation  yields  the  largest  returns,  the  cul- 
tivator or  the  government;  and  we  may  fairly  take  it  for 
granted,  that  the  cultivator,  residing  on  the  spot,  making  it 
the  object  of  constant  study  and  inquiry,  and  more  interested 
in  success  than  anybody,  is  better  informed  in  this  respect 
than  the  government. 

Should  it  be  insisted  upon  in  argument,  that  the  cultivator 
knows  only  the  price-current  of  the  day,  and  does  not,  like 
the  government,  provide  for  the  future  wants  of  the  people, 
it  may  be  answered,  that  one  of  the  talents  of  a  producer, 
and  a  talent  his  own  interest  obliges  him  assiduously  to~ 
cultivate,  is  not  the  mere  knowledge,  but  the  fore-knowledge, 
of  human  wants. 

An  evil  of  the  same  description  was  occasioned,  when,  at 
another  period,  the  proprietors  were  compelled  to  cultivate 
beet-root  or  woad  in  lieu  of  grain;  indeed,  we  may  observe, 
en  passant,  that  it  is  always  a  bad  speculation  to  attempt 
raising  the  products  of  the  torrid,  under  the  sun  of  the  tem- 
perate latitudes.  The  saccharine  and  coloring  juices,  raised 
on  the  European  soils,  with  all  the  forcing  in  the  world,  are 
very  inferior  in  quantity  and  quality  to  those  that  grow  in 
profusion  in  other  climates;  while,  on  the  other  hand,  those 
soils  yield  abundance  of  grain  and  fruits  too  bulky  and 
heavy  to  be  imported  from  a  distance.  In  condemning  our 
lands  to  the  growth  of  products  ill  suited  to  them,  instead 
of  those  they  are  better  calculated  for,  and,  consequently, 
buying  very  dear  what  we  might  have  cheap  enough,  if  we 
would  consent  to  receive  them  from  places  where  they  are 
produced  with  advantage,  we  are  ourselves  the  victims  of  our 
own  absurdity.  It  is  the  very  acme  of  skill,  to  turn  the 
powers  of  nature  to  best  account,  and  the  height  of  madness 


PRESCRIBING    THE   NATURE    OF    PRODUCTS.  47 

to  contend  against  them;  which  is  in  fact  wasting  part  of 
our  strength,  in  destroying  those  powers  she  designsd  for 
our  aid. 

Again,  it  is  laid  down  as  a  maxim,  that  it .  is  better  to  buy 
products  dear,  when  the  price  remains  in  the  country,  than 
to  get  them  cheap  from  foreign  growers.  On  this  point  I 
must  refer  my  readers  to  that  analysis  of  production  which 
we  have  just  gone  through.  It  will  there  be  seen,  that 
products  are  not  to  be  obtained  without  some  sacrifice,  — 
without  the  consumption  of  commodities  and  productive  ser- 
vices in  some  ratio  or  other,  the  value  of  which  is  in  this 
way  as  completely  lost  to  the  community,  as  if  it  were  to  be 
exported. 

I  can  hardly  suppose  any  government  will  be  bold  enough 
to  object,  that  it  is  indifferent  about  the  profit,  which 
might  be  derived  from  a  more  advantageous  production, 
because  it  would  fall  to  the  lot  of  individuals.  The  worst 
governments,  those  which  set  up  their  own  interest  in  the 
most  direct  opposition  to  that  of  their  subjects,  have  by  this 
time  learned,  that  the  revenues  of  individuals  are  the  regen- 
erating source  of  public  revenue;  and  that,  even  under  des- 
potic and  military  sway,  where  taxation  is  mere  organized 
spoliation,  the  subjects  can  pay  only  what  they  have  them- 
selves acquired. 

The  maxims  we  have  been  applying  to  agriculture  are 
equally  applicable  to  manufacture.  Sometimes  a  govern- 
ment entertains  a  notion,  that  the  manufacture  of  a  native 
raw  material  is  better  for  the  national  industry,  than  the 
manufacture  of  a  foreign  raw  material.  It  is  in  conformity 
to  this  notion,  that  we  have  seen  instances  of  preference 
given  to  the  woolen  and  linen  above  the  cotton  manufacture. 
By  this  conduct  we  contrive,  as  far  as  in  us  lies,  to  limit  the 
bounty  of  nature,  which  pours  forth  in  different  climates  a 
variety  of*  materials  adapted  to  our  innumerable  wants. 
Whenever  human  efforts  succeed  in  attaching  to  these  gifts 


48  EFFECTS   OF   REGULATIONS 

a  value,  that  is  to  say,  a  degree  of  utility,  whether  by  their 
import,  or  by  any  modification  we  may  subject  them  to,  a 
useful  act  is  performed,  and  an  item  added  to  national 
wealth.  The  sacrifice  we  made  to  foreigners  in  procuring 
the  raw  material  is  not  a  whit  more  to  be  regretted,  than  the 
sacrifice  of  advances  and  consumption,  that  must  be  made 
in  every  branch  of  production,  before  we  can  get  a  new 
product.  Personal  interest  is,  in  all  cases,  the  best  judge 
of  the  extent  of  the  sacrifice,  and  of  the  indemnity  we 
may  expect  for  it;  and,  although  this  guide  may  sometimes 
mislead  us,  it  is  the  safest  in  the  long  run,  as  well  as  the 
least  costly. 

But  personal  interest  is  no  longer  a  safe  criterion,  if  indi- 
vidual interests  are  not  left  to  counteract  and  control  each 
other.  If  one  individual,  or  one  class,  can  call  in  the  aid  of 
authority  to  ward  off  the  effects  of  competition,  it  acquires  a 
privilege  to  the  prejudice  and  at  the  cost  of  the  whole  commu- 
nity ;  it  can  then  make  sure  of  profits  not  altogether  due  to 
the  productive  services  rendered,  but  composed  in  part  of  an 
actual  tax  upon  consumers  for  its  private  profit  ;  which  tax 
it  commonly  shares  with  the  authority  that  thus  unjustly 
lends  its  support. 

The  legislative  body  has  great  difficulty  in  resisting  the 
importunate  demands  for  this  kind  of  privileges;  the  appli- 
cants are  the  producers  that  are  to  benefit  thereby,  who  can 
represent,  with  much  plausibility,  that  their  own  gains  are  a 
gain  to  the  industrious  classes,  and  to  the  nation  ab  large, 
their  workmen  and  themselves  being  members  of  the  indus- 
trious classes,  and  of  the  nation.* 

When  the  cotton  manufacture  was  first  introduced  in 
'France,  all  the  merchants  of  Amiens,  Rheims,  Beauvias,  etc., 
joined  in  loud  remonstrances,  and  represented  that  the  indus- 

*No  one  cries  out  against  them,  because  very  few  know  who  it  is  that  pays  the 
gains  of  the  monopolist.  The  real  sufferers,  the  consumers  themselves,  often  feel 
the  pressure,  without  being  aware  of  the  cause  of  it,  and  are  the  first  to  abuse  the 
enlightened  individuals,  who  are  really  advocating  their  interests. 


PRESCRIBING   THE   NATURE    OP   PRODUCTS.  49 

try  of  these  towns  was  annihilated.  Yet  they  do  not  appear 
less  industrious  or  rich  than  they  were  fifty  years  ago  ;  while 
the  opulence  of  Rouen  and  all  Normandy  has  been  wonder- 
fully increased  by  the  new  fabric. 

The  outcry  was  infinitely  greater,  when  printed  calicoes 
first  came  into  fashion  ;  all  the  chambers  of  commerce  were 
up  in  arms  ;  meetings,  discussions  everywhere  took  place  ; 
memorials  and  deputations  poured  in  from  every  quarter, 
and  great  sums  were  spent  in  the  opposition.  Rouen  now 
stood  forward  to  represent  the  misery  about  to  assail  her, 
and  painted,  in  moving  colors,  "  old  men,  women,  and  child- 
ren, rendered  destitute  ;  the  best  cultivated  lands  in  the 
kingdom  lying  waste,  and  the  whole  of  a  rich  and  beautiful 
province  depopulated."  The  city  of  Tours  urged  the  lamen- 
tations of  the  deputies  of  the  whole  kingdom,  and  foretold 
u  a  commotion  that  would  shake  the  frame  of  social  order 
itself."  Lyons  could  not  view  in  silence  a  project  "  which 
filled  all  her  manufactories  with  alarm."  Never  on  so  im- 
portant an  occasion  had  Paris  presented  itself  at  the  foot  of 
a  throne,  "  watered  with  the  tears  of  commerce."  Amiens 
viewed  the  introduction  of  printed  calicoes  as  the  gulf  that 
must  inevitably  swallow  up  all  the  manufactures  of  the  king- 
dom. The  memorial  of  that  city,  drawn  up  at  a  joint  meet- 
ing of  the  three  corporations,  and  signed  unanimously,  ended 
in  these  terms  :  "  To  conclude,  it  is  enough  for  the  eternal 
prohibition  of  the  use  of  printed  calicoes,  that  the  whole 
kingdom  is  chilled  with  horror  at  the  news  of  their  proposed 
toleration.  Vox  populi  vox  dei." 

Hear  what  Roland  de  la  Platiere,  who  had  the  presenta- 
tion of  these  remonstrances  in  quality  of  inspector -general 
of  manufactures,  says  on  this  subject:  "  Is  there  a  single  indi- 
vidual at  the  present  moment,  who  is  mad  enough  to  deny, 
that  the  fabric  of  printed  calicoes  employs  an  immense  num- 
ber of  hands,  what  with  the  dressing  of  cotton,  the  spinning, 
weaving,  bleaching,  and  printing  ?  This  article  has  improved 
3 


50  EFFECTS    OF   REGULATIONS 

the  art  of  dyeing  in  a  few  years,  more  than  all  the  other 
manufactures  together  have  done  in  a  century." 

I  must  beg  my  readers  to  pause  a  moment,  and  reflect, 
what  firmness  and  extensive  information  respecting  the 
sources  of  public  prosperity  were  necessary  to  uphold  an  ad- 
ministration against  so  general  a  clamor,  supported  amongst 
the  principal  agents  of  authority,  by  ether  motives,  besides 
that  of  public  utility. 

Though  governments  have  too  often  presumed  upon  their 
power  to  benefit  the  general  wealth,  by  prescribing  to  agri- 
culture and  manufacture  the  raising  of  particular  products, 
they  have  interfered  much  more  particularly  in  the  concerns 
of  commerce,  especially  of  external  commerce.  These  bad 
consequences  have  resulted  from  a  general  system,  distin- 
guished by  the  name  of  the  exclusive  or  mercantile  system, 
which  attributes  the  profits  of  a  nation  to  what  is  technically 
called  a  favorable  balance  of  trade. 

We  have  seen,  that  the  very  advantages  aimed  at  by  the 
means  of  a  favorable  balance  of  trade,  are  altogether  illusory ; 
and  that,  supposing  them  real,  it  is  impossible  for  a  nation 
permanently  to  enjoy  them.  It  remains  to  be  shown,  what  is 
the  actual  operation  of  regulations  framed  with  this  object 
in  view. 

By  the  absolute  exclusion  of  specific  manufactures  of  for- 
eign fabric,  a  government  establishes  a  monopoly  in  favor  of  the 
home  producers  of  these  articles,  and  in  prejudice  of  the  home 
consumers  ;  that  is  to  say,  those  classes  of  the  nation  which 
produce  them,  being  entitled  to  their  exclusive  sale,  can  raise 
their  prices  above  the  natural  rate  ;  while  the  home  con- 
sumers, being  unable  to  purchase  elsewhere,  are  compelled 
to  pay  for  them  unnaturally  dear.  If  the  articles  be  not 
wholly  prohibited,  but  merely  saddled  with  an  importrduty, 
the  home  producer  can  then  increase  their  price  by  the  whole 
amount  of  the  duty,  and  the  consumer  will  have  to  pay  the 
difference.  For  example,  if  an  import  duty  of  20  cents  per 


PRESCRIBING    THE   NATURE    OP    PRODUCTS.  51 

dozen  be  laid  upon  earthenware  plates  worth  60  cents  per 
dozen,  the  importer,  whatever  country  he  may  belong  to, 
must  charge  the  consumer  30  cents  ;  and  the  home  manufac- 
turer of  that  commodity  is  enabled  to  ask  80  cents  per  dozen 
of  his  customers  for  plates  of  the  same  quality  ;  which  he 
could  not  do  without  tie  intervention  of  the  duty ;  because 
the  consumer  could  get  the  same  article  for  60  cents  :  thus, 
a  premium  to  the  whole  extent  of  the  duty  is  given  to  the 
home  manufacturer  out  of  the  consumer's  pocket. 

Should  any  one  maintain,  that  the  advantage  of  producing 
at  home  counterbalances  the  hardship  of  paying  dearer  for 
almost  every  article;  that  our  own  capital  and  labor  are 
engaged  in  the  production,  and  the  profits  pocketed  by  our 
own  fellow-citizens;  my  answer  is,  that  the  foreign  com- 
modities we  might  import  are  not  to  be  had  gratis:  that  we 
must  purchase  them  with  values  of  home  production,  which 
would  have  given  equal  employment  to  our  industry  and 
capital;  for  we  must  never  lose  sight  of  this  maxim,  that 
•products  are  always  bought  ultimately  with  products.  It  is 
most  for  our  advantage  to  employ  our  productive  powers, 
not  in  those  branches  in  which  foreigners  excel  us,  but  in 
those  which  we  excel  in  ourselves;  and  with  the  product  to 
purchase  of  others.  The  opposite  course  would  be  just  as 
absurd,  as  if  a  man  should  wish  to  make  his  own  coats  and 
shoes.  What  would  the  world  say,  if,  at  the  door  of  every 
house  an  import  duty  were  laid  upon  coats  and  shoes,  for 
the  laudable  purpose  of  compelling  the  inmates  to  ma^ke 
them  for  themselves  ?  Would  not  people  say  with  justice, 
Let  us  follow  each  his  own  pursuits,  and  buy  what  we  want 
with  what  we  produce,  or,  which  comes  to  the  same  thing, 
with  what  we  get  for  our  products.  The  system  would  be 
precisely  the  same,  only  carried  to  a  ridiculous  extreme. 

Well  may  it  be  a  matter  of  wonder,  that  every  nation 
should  manifest  such  anxiety  to  obtain  prohibitory  regula- 
tions, if  it  be  true  that  it  can  profit  nothing  by  them;  and 


52  EFFECTS   OF   REGULATIONS 

lead  one  to  suppose  the  two  cases  not  parallel,  because  we 
do  not  find  individual  householders  -solicitous  to  obtain  the 
same  privilege.  But  the  sole  difference  is  this,  that  individ- 
uals are  independent  and  consistent  beings,  actuated  by  no 
contrariety  of  will,  and  more  interested  in  their  character  of 
consumers  of  coats  and  shoes  to  buy  them  cheap,  than  as 
manufacturers  to  sell  unnaturally  dear. 

Who,  then,  are  the  classes  of  the  community  so  importu- 
nate for  prohibitions  or  heavy  import  duties?  The  producers 
of  the  particular  commodity,  that  applies  for  protection  from 
competition,  not  the  consumers  of  that  commodity.  The 
public  interest  is  their  plea,  but  self-interest  is  evidently 
their  object.  Well,  but,  say  these  gentry,  are  they  not  the 
same  thing?  are  not  our  gains  national  gains?  By  no  means: 
whatever  profit  is  acquired  in  this  manner,  is  so  much  taken 
out  of  the  pockets  of  a  neighbor  and  fellow-citizen,  and,  if 
the  excess  of  a  charge  thrown  upon  consumers  by  the 
monopoly  could  be  correctly  computed,  it  would  be  found, 
that  the  loss  of  the  consumer  exceeds  the  gain  of  the 
monopolist.  Here,  then,  individual  and  public  interest  are 
in  direct  opposition  to  each  other;  and,  since  public  interest 
is  understood  by  the  enlightened  few  alone,  is  it  at  all 
surprising,  that  the  prohibitive  system  should  find  so  many 
partisans  and  so  few  opponents? 

There  is  in  general  far  too  little  attention  paid  to  the 
serious  mischief  of  raising  prices  upon  the  consumers.  The 
evil  is  not  apparent  to  cursory  observation,  because  it  ope- 
rates piecemeal,  and  is  felt  in  a  very  slight  degree  on  every 
purchase  or  act  of  consumption :  but  it  is  really  most  serious, 
on  account  of  its  constant  recurrence  and  universal  pressure. 
The  whole  fortune  of  every  consumer  is  affected  by  every 
fluctuation  of  price  in  the  articles  of  his  consumption;  the. 
cheaper  they  are,  the  richer  he  is,  and  vice  versa.  If  a  single 
article  rise  in  price,  he  is  so  much  the  more  poor  in  respect 
of  that  article;  if  all  rise  together,  he  is  poorer  in  respect  to 


PRESCRIBING    THE   NATURE    OF   PRODUCTS.  53 

the  whole.  And,  since  the  whole  nation  is  comprehended 
in  the  class  of  the  consumers,  the  whole  nation  must  in  that 
case  be  the  poorer.  Besides  which,  it  is  crippled  in  the 
extension  of  the  variety  of  its  enjoyments,  and  prevented 
from  obtaining  products  whereof  it  stands  in  need,  in 
exchange  for  those  wherewith  it  might  procure  them.  It  is 
of  no  use  to  assert,  that,  when  prices  are  raised,  what  one 
gains  another  loses.  For  the  position  is  not  true,  except  in 
the  case  of  monopolies;  nor  even  to  the  fall  extent  with 
regard  to  them;  for  the  monopolist  never  profits  to  the  ful] 
amount  of  the  loss  to  the  consumers.  If  the  rise  be  occa- 
sioned by  taxation  or  import  duty  under  any  shape  whatever, 
the  producer  gains  nothing  by  the  increase  of  price,  but 
just  the  reverse,  so  that,  in  fact,  he  is  no  richer  in  his  capacity 
of  producer,  though  poorer  in  his  quality  of  consumer. 
This  is  one  of  the  most  effective  causes  of  national  impov- 
erishment, or  at  least  one  of  the  most  powerful  checks  to 
the  progress  of  national  wealth. 

For  this  reason,  it  may  be  perceived,  that  it  is  an  absurd 
distinction  to  view  with  more  jealousy  the  import  of  foreign 
objects  of  barren  consumption,  than  that  of  raw  materials 
for  home  manufacture.  Whether  the  products  consumed 
be  of  domestic  or  of  foreign  growth,  a  portion  of  wealth  is 
destroyed  in  the  act  of  consumption,  and  a  proportionate 
inroad  made  into  the  wealth  of  the  community.  But  that 
inroad  is  the  result  of  the  act  of  consumption,  not  of  the 
act  of  dealing  with  the  foreigner;  and  the  resulting  stimulus 
to  national  production,  is  the  same  in  either  case.  For, 
wherewith  was  the  purchase  of  the  foreign  product  made? 
either  with  a  domestic  product  or  with  money,  which  must 
itself  have  been  procured  with  a  domestic  product.  In 
buying  of  a  foreigner,  the  nation  really  does  no  more  than 
send  abroad  a  domestic  product  in  lieu  of  consuming  it  at 
home,  and  consume  in  its  place  the  foreign  product  received 
in  exchange.  The  individual  consumer  himself,  probably, 


54  EFFECTS    OF   REGULATIONS 

does  not  conduct  this  operation;  commerce  conducts  it  for 
him.  No  one  country  can  buy  of  another,  except  with  its 
own  domestic  products. 

In  defense  of  import  duties  it  is  often  urged,  "  that  when 
the  interest  of  money  is  lower  abroad  than  at  home,  the 
foreign  has  an  advantage  over  the  home  producer,  which 
must  be  met  by  a  countervailing  duty."  The  lower  rate  of 
interest  is,  to  the  foreign  producer,  an  advantage,  analogous 
to  that  of  the  superior  quality  cf  his  land.  It  tends  to 
cheapen  the  products  he  raises;  and  it  is  reasonable  enough 
that  our  domestic  consumers  should  take  the  benefit  of  that 
cheapness.  The  same  motive  will  operate  here,  that  leads 
us  rather  to  import  sugar  and  indigo  from  tropical  climates, 
than  to  raise  them  in  our  own. 

"But  capital  is  necessary  in  every  branch  of  production: 
so  that  the  foreigner,  who  can  procure  it  at  a  lower  rate  oi 
interest,  has  the  same  advantage  in  respect  to  every  product; 
and,  if  the  free  importation  be  permitted,  he  will  have  an 
advantage  over  all  classes  of  home  producers."  Tell  me, 
then,  how  his  products  are  to  be  paid  for.  "Why,  in  specie, 
and  there  lies  the  mischief."  And  how  is  the  specie  to  be 
got  to  pay  for  them?  "  All  the  nation  has,  will  go  in  that 
way;  and  when  it  is  exhausted  national  misery  will  be  com- 
plete." So,  then,  it  is  admitted,  that  before  arriving  at  this 
extremity,  the  constant  efflux  of  specie  will  gradually  render 
it  more  scarce  at  home,  and  more  abundant  abroad;  where- 
fore, it  will  gradually  rise  1,  2,  3,  per  cent,  higher  in  value 
at  home  than  abroad;  which  is  fully  sufficient  to  turn  the 
tide,  and  make  specie  flow  inwards  faster  than  it  flowed 
outwards.  But  it  will  not  do  so  without  some  returns;  and 
of  what  can  the  returns  be  made,  but  of  products  of  the 
land,  or  the  commerce  of  the  nation?  For  there  is  no 
possible  means  of  purchasing  from  foreign  nations,  other- 
wise than  with  the  products  of  the  national  land  and  com- 
merce; and  it  is  better  to  buy  of  them  what  they  can 


PRESCRIBING  THE   NATURE    OF   PRODUCTS.  55 

produce  cheaper  than  ourselves,  because  we  may  rest  assured 
that  they  must  take  in  payment  what  we  can  produce 
cheaper  than  they.  This  they  must  do,  else  there  must  be 
an  end  of  all  interchange. 

In  pursuit  of  what  it  mistakes  for  profound  policy,  or  to 
gratify  feelings  it  supposes  to  be  laudable,  a  government  will 
sometimes  prohibit  or  divert  the  course  of  a  particular  trade, 
and  thereby  do  irreparable  mischief  to  the  productive  powers 
of  the  nation.  When  Philip  II  became  master  of  Portugal, 
and  forbade  all  intercourse  between  his  new  subjects  and  the 
Dutch,  whom  he  detested,  what  was  the  consequence?  The 
Dutch,  who  before  resorted  to  Lisbon  for  the  manufactures 
of  India,  of  which  they  took  off  an  immense  quantity,  find- 
ing this  avenue  closed  against  their  industry,  went  straight 
to  India  for  what  they  wanted,  and  in  the  end,  drove  out  the 
Portuguese  from  that  quarter;  and,  what  was  meant  as  the 
deadly  blow  of  inveterate  hatred,  turned  out  the  main  source 
of  their  aggrandizement.  "  Commerce,"  says  Fenelon,"is 
like  the  native  springs  of  the  rock,  which  often  cease  to  flow 
altogether,  if  it  be  attempted  to  alter  their  course."* 

Such  are  the  principal  evils  of  impediments  thrown  in  the 
way  of  import,  which  are  carried  to  the  extreme  point  by 
absolute  prohibition.  There  have,  indeed,  been  instances  of 
nations  that  have  thriven  under  such  a  system ;  but  then  it 
was  because  the  causes  of  national  prosperity  were  more 
powerful  than  the  causes  of  national  impoverishment.  Nations 
resemble  the  human  frame,  which  contains  a  vital  principle, 
that  incessantly  labors  to  repair  the  inroads  of  excess  and 
dissipation  upon  its  health  and  constitution.  Nature  is  active 

*  The  national  convention  of  France  prohibited  the  import  of  raw  hides  from 
Spain,  on  the  plea  that  they  injured  the  trade  in  those  of  France;  not  observing, 
that  the  self -same  hides  went  back  to  Spain  in  a  tanned  state.  The  tanneries  of 
France  being  obliged  to  procure  the  raw  article  at  too  dear  a  rate,  were  quickly 
abandoned;  and  the  manufacture  was  transferred  to  Spain,  along  with  great  part 
of  the  capital,  and  many  of  the  hands  employed.  It  is  next  to  impossible  for  a 
government,  not  only  to  do  any  good  to  national  production  by  its  interference, 
but  even  to  avoid  doing  mischief. 


56  EFFECTS   OF  EEGULATIONS 

in  closing  the  wounds  and  healing  the  bruises  inflicted  by 
our  own  awkardness  and  intemperance.  In  like  manner, 
states  maintain  themselves,  nay,  often  increase  in  prosperity, 
in  spite  of  the  infinite  injuries  of  every  description,  which 
friends  as  well  as  enemies  inflict  upon  them.  And  it  is  worth 
remarking,  that  the  most  industrious  nations  are  those, 
which  are  the  most  subjected  to  such  outrage,  because  none 
others  could  survive  them.  The  cry  is  then  '-our  system 
must  be  the  true  one,  for  the  national  prosperity  is  advanc- 
ing." Whereas,  were  we  to  take  an  enlarged  view  of  the 
circumstances  that  for  the  last  three  centuries  have  com- 
bined to  develop  the  power  and  faculties  of  man ;  to  survey 
with  the  eye  of  intelligence  the  progress  of  navigation  and 
discovery,  of  invention  in  every  branch  of  art  and  science; 
to  take  account  of  the  variety  of  useful  animals  and  vegeta- 
bles that  have  been  transplanted  from  one  hemisphere  to  the 
other,  and  to  give  a  due  attention  to  the  vast  augmentation 
and  increased  scope  both  of  science  and  of  its  practical  appli- 
cations that  we  are  daily  witnesses  of,  we  could  not  resist  the 
conviction,  that  our  actual  prosperity  is  nothing  to  what  it 
might  have  been ;  that  it  is  engaged  in  a  perpetual  struggle 
against  the  obstacles  and  impediments  thrown  into  its  way; 
and  that  even  in  those  parts  of  the  world  where  mankind  is 
deemed  the  most  enlightened,  a  great  part  of  their  time  and 
exertions  are  occupied  in  destroying  instead  of  multiplying 
their  resources,  in  despoiling  instead  of  assisting  each  other; 
and  all  for  want  of  correct  knowledge  and  information 
respecting  their  real  interests. 

But,  to  return  to  the  subject  we  have  just  been  examin- 
ing, the  nature  of  the  injury  that  a  community  suffers  by 
difficulties  thrown  in  the  way  of  the  introduction  of  foreign 
commodities.  The  mischief  occasioned  to  the  country  that 
produces  the  prohibited  article,  is  of  the  same  kind  and  de- 
scription.  It  is  prevented  from  turning  its  capital  and  indus- 
try to  the  best  account.  But  it  is  not  to  be  supposed  that 


PRESCRIBING    THE    NATURE    OF    PRODUCTS.  57 

the  foreign  nation  can  by  this  means  be  utterly  ruined  and 
stripped  of  all  resource,  as  Napoleon  seemed  to  imagine,  when 
he  excluded  the  products  of  Britain  from  the  markets  of  the 
continent.  To  say  nothing  of  the  impossibility  of  effecting  a 
complete  and  actual  blockade  of  a  whole  country,  opposed  as 
it  must  be  by  the  universal  motive  of  self-interest,  the  utmost 
effect  of  it  can  only  be  to  drive  its  production  into  a  differ- 
ent channel.  A  nation  is  always  competent  to  the  purchase 
and  consumption  of  the  whole  of  its  own  products,  for  pro- 
ducts are  always  bought  with  other  products.  Do  you  think 
it  possible  to  prevent  England  from  producing  value  to  the 
amount  of  a  million,  by  preventing  her  export  of  woolens  to 
that  amount?  You  are  much  mistaken  if  you  do.  England 
will  employ  the  same  capital  and  the  same  manual  labor  in 
the  preparation  of  ardent  spirits,  by  the  distillation  of  grain  or 
other  domestic  products,  that  were  before  occupied  in  the  man- 
ufacture of  woolens  for  the  French  market,  and  she  will  then 
no  longer  bring  her  woolens  to  be  bartered  for  French  brandies. 
A  country,  in  one  way  or  other,  direct  or  indirect,  always 
consumes  the  values  it  produces,  and  can  consume  nothing 
more.  If  it  cannot  exchange  its  products  with  its  neighbors, 
it  is  compelled  to  produce  values  of  such  kinds  only  as  it  can 
consume  at  home.  This  is  the  utmost  effect  of  prohibitions; 
both  parties  are  worse  provided,  and  neither  is  at  all  the 
richer. 

Napoleon,  doubtless,  occasioned  much  injury,  both  to  Eng- 
land and  to  the  continent,  by  cramping  their  mutual  relations 
of  commerce  as  far  as  he  possibly  could.  But,  on  the  other 
hand,  he  did  the  continent  of  Europe  the  involuntary  service 
of  facilitating  the  communication  between  its  different  parts, 
by  the  universality  of  dominion,  which  his  ambition  had  well- 
nigh  achieved.  The  frontier  duties  between  Holland,  Bel- 
gium,  part  of  Germany,  Italy,  and  France,  were  demolished; 
and  those  of  the  other  powers,  with  the  exception  of  England, 
were  far  from  oppressive.  We  may  form  some  estimate  of 


58  EFFECTS    OF    REGULATIONS 

the  benefit  thence  resulting  to  commerce,  from  the  discontent 
and  stagnation  that  have  ensued  upon  the  establishment  of 
the  present  system  of  lining  the  frontier  of  each  state  with  a 
triple  guard  of  douaniers.  All  the  continental  states  so 
guarded  have,  indeed,  preserved  their  former  means  of  pro- 
duction; but  that  production  has  been  made  less  advantageous. 

It  cannot  be  denied,  that  France  has  gained  prodigiously 
by  the  suppression  of  the  provincial  barriers  and  custom- 
houses, consequent  upon  her  political  revolution.  Europe 
had,  in  like  manner,  gained  by  the  partial  removal  of  the 
international  barriers  between  its  different  political  states; 
and  the  world  at  large  would  derive  similar  benefit  from  the 
demolition  of  those,  which  insulate,  as  it  were,  the  various 
communities  into  which  the  hum  an  race  is  divided. 

•I  have  omitted  to  mention  other  very  serious  evils  of  the 
exclusive  system ;  as,  for  instance,  the  creation  of  a  new  class 
of  crime,  that  of  smuggling;  whereby  an  action  wholly  inno 
cent  in  itself,  is  made  legally  criminal;  and  persons,  who  are 
actually  laboring  for  the  general  welfare,  are  subjected  to 
punishment. 

Smith  admits  of  two  circumstances,  that,  in  his  opinion, 
will  justify  a  government  in  resorting  to  import-duties:  — 
1 .  When  a  particular  branch  of  industry  is  necessary  to  the 
public  security,  and  the  external  supply  cannot  be  safely 
reckoned  upon.  On  this  account  a  government  may  very 
wisely  prohibit  the  import  of  gunpowder,  if  such  prohibi- 
tion be  necessary  to  set  the  powder-mills  at  home  in  activity; 
for  it  is  better  to  pay  somewhat  dear  for  so  essential  an  arti- 
cle, than  to  run  the  risk  of  being  unprovided  in  the  hour  of 
need.  2.  Where  a  similar  commodity  of  home  produce  is 
already  saddled  with  a  duty.  The  foreign  article,  if  wholly 
exempt  from  duty,  would  in  this  case  have  an  actual  privi- 
lege ;  so  that  a  duty  imposed  has  not  the  effect  of  destroying, 
but  of  restoring  the  natural  equilibrium  and  relative  position 
of  the  different  branches  of  production. 


PRESCRIBING    THE   NATURE    OF   PRODUCTS.  59 

Indeed,  it  is  impossible  to  find  any  reasonable  ground  for 
exempting  the  production  of  values  by  the  channel  of  exter- 
nal commerce  from  the  same  pressure  of  taxation  that  weighs 
upon  the  production  effected  in  those  of  agriculture  and  man- 
ufacture. Taxation  is,  doubtless,  an  evil,  and  one  which 
should  be  reduced  to  the  lowest  possible  degree;  but  when 
once  a  given  amount  of  taxation  is  admitted  to  be  necessary, 
it  is  but  common  justice  to  lay  it  equally  on  all  three 
branches  of  industry.  The  error  I  wish  to  expose  to  repro- 
bation is  the  notion  that  taxes  of  this  kind  are  favorable  to 
production.  A  tax  can  never  be  favorable  to  the  public 
welfare,  except  by  the  good  use  that  is  made  of  its  proceeds. 

These  points  should  never  be  lost  sight  of  in  the  framing 
of  commercial  treaties,  which  are  really  good  for  nothing  but 
to  protect  industry  and  capital,  diverted  into  improper  chan- 
nels by  the  blunders  of  legislation.  These  it  would  be  far 
wiser  to  remedy  than  to  perpetuate.  The  healthy  state  of 
industry  and  wealth  is  the  state  of  absolute  liberty,  in  which 
each  interest  is  left  to  take  care  of  itself.  The  only  useful 
protection  authority  can  afford  them  is  that  against  fraud  or 
violence.  Taxes  and  restrictive  measures  never  can  be  a 
benefit:  they  are  at  the  best  a  necessary  evil;  to  suppose  them 
useful  to  the  subjects  at  large,  is  to  mistake  the  foundation 
of  national  prosperity,  and  to  set  at  naught  the  principles  of 
political  economy. 

Import  duties  and  prohibitions  have  often  been  resorted 
to  as  a  means  of  retaliation:  "Your  government  throws 
impediments  in  the  way  of  introduction  of  our  national  pro- 
ducts; are  not  we,  then,  justified  in  equally  impeding  the  intro- 
duction  of  yours?  "  This  is  the  favorite  plea,  and  the  basis 
of  most  commercial  treaties;  but  people  mistake  their  object; 
granting  that  nations  have  a  right  to  do  one  another  as  much 
mischief  as  possible;  which,  by  the  way,  I  can  hardly  admit; 
I  am  not  here  disputing  their  rights,  but  discussing  their 
interests. 


GO  EFFECTS   OF   REGULATIONS 

Undoubtedly,  a  nation  that  excludes  you  from  all  com- 
mercial intercourse  with  her,  does  you  an  injury; — robs  you, 
as  far  as  in  her  lies,  of  the  benefits  of  external  commerce;  if, 
therefore,  by  the  dread  of  retaliation,  you  can  induce  her  to 
abandon  her  exclusive  measures,  there  is  no  question  about 
the  expediency  of  such  retaliation,  as  a  matter  of  mere 
policy.  But  it  must  not  be  forgotten  that  retaliation  hurts 
yourself  as  well  as  your  rival;  that  it  operates,  not  defen- 
sively against  her  selfish  measures,  but  offensively  against 
yourself,  in  the  first  instance,  for  the  purpose  of  indirectly 
attacking  her.  The  only  point  in  question  is  this,  what 
degree  of  vengeance  you  are  animated  by,  and  how  much 
will  you  consent  to  throw  away  upon  its  gratification.  I 
will  not  undertake  to*  enumerate  all  the  evils  arising  from 
treaties. of  commerce,  or  to  apply  the  principles  enforced 
throughout  this  work  to  all  the  clauses  and  provisions  usually 
contained  in  them.  I  will  confine  myself  to  the  remark, 
that  almost  every  modern  treaty  of  commerce  has  had  for 
its  basis  the  imaginary  advantage  and  possibility  of  the 
liquidation  of  a  favorable  balance  of  trade  by  an  import  of 
specie.  If  these  turn  out  to  be  chimerical,  whatever  advan- 
tage may  have  resulted  from  such  treaties  rriust  be  wholly 
referred  to  the  additional  freedom  and  facility  of  interna- 
tional communication  obtained  by  them,  and  not  at  all  to 
their  restrictive  clauses  or  provisoes,  unless  either  of  the 
contracting  parties  has  availed  itself  of  its  superior  power, 
to  exact  conditions  savoring  of  a  tributary  character;  as 
England  has  done  in  relation  to  Portugal.  In  such  case,  it 
is  mere  exaction  and  spoliation. 

Again,  I  would  observe,  that  the  offer  of  peculiar  advan- 
tages by  one  nation  to  another,  in  the  way  of  a  treaty  of 
commerce,  if  not  an  act  of  hostility,  is  at  least  one  of  ex- 
treme odium  in  the  eyes  of  other  nations.  For  the  conces- 
sion to  one  can  only  be  rendered  effectually  by  the  refusal 
to  others.  Hence  the  germ  of  discord  and  of  war,  with  all 


PRESCRIBING    THE   NATURE    OF   PRODUCTS.  61 

its  mischiefs.  It  is  infinitely  more  simple,  and  I  hope  to 
have  shown,  more  profitable  also,  to  treat  all  nations  as 
friends,  and  impose  no  higher  duties  on  the  introduction  of 
their  products,  than  what  are  necessary  to  place  them  on  the 
same  footing  as  those  of  domestic  growth. 

Yet,  notwithstanding  all  the  mischiefs  resulting  from  the 
exclusion  of  foreign  products,  which  I  have  been  depicting, 
it  would  be  an  act  of  unquestionable  rashness  suddenly  to 
change  even  so  ruinous  a  policy.  Disease  is  not  to  be  eradi- 
cated in  a  moment;  it  requires  nursing  and  management  to 
dispense  even  national  benefits.  Monopolies  are  an  abuse, 
but  an  abuse  in  which  enormous  capital  is  vested,  and  num- 
berless industrious  agents  employed,  which  deserve  to  be 
treated  with  consideration;  for  this  mass  of  capital  and 
industry  cannot  all  at  once  find  a  more  advantageous  chan- 
nel of  national  production.  Perhaps  the  cure  of  all  the 
partial  distresses  that  must  follow  the  downfall  of  that 
colossal  monster  in  politics,  the  exclusive  system,  would  be 
as  much  as  the  talent  of  any  single  statesman  could  accom- 
plish; yet  when  one  considers  calmly  the  wrongs  it  entails 
when  it  is  established,  and  the  distresses  consequent  upon  its 
overthrow,  we  are  insensibly  led  to  the  reflection,  that,  if  it 
be  so  difficult  to  set  shackled  industry  at  liberty  again,  with 
what  caution  ought  we  not  to  receive  any  proposition  for 
enslaving  her! 

But  governments  have  not  been  content  with  checking  the 
import  of  foreign  products.  In  the  firm  conviction,  that 
national  prosperity  consists  in  selling  without  buying,  and 
blind  to  the  utter  impossibility  of  the  thing,  they  have  gone 
beyond  the  mere  imposition  of  a  tax  or  fine  upon  purchas- 
ing of  foreigners,  and  have  in  many  instances  offered  re- 
wards in  the  shape  of  bounties  for  selling  to  them. 


CHAPTER  IV. 

SPEECH  OP  HENRY   CLAY 

IN  DEFENCE  OF  THE  AMERICAN  SYSTEM,*  IN  THE  SENATE  OF 
THE  UNITED  STATES,  FEBRUARY  2,  3,  AND  6,  1832. 


IN  one  sentiment,  Mr.  President,  expressed  by  the  honor- 
able gentleman  from  South  Carolina  (General  Hayne), 
though  perhaps  not  in  the  sense  intended  by  him,  I  entirely 
concur.  I  agree  with  him,  that  the  decision  on  the  system  of 
policy  embraced  in  this  debate,  involves  the  future  destiny 
of  this  growing  country.  One  way  I  verily  believe,  it 
would  lead  to  deep  and  general  distress,  general  bankruptcy 
and  national  ruin,  without  benefit  to  any  part  of  the  Union; 
the  other,  the  existing  prosperity  will  be  preserved  and 
augmented,  and  the  nation  will  continue  rapidly  to  advance 
in  wealth,  power,  and  greatness,  without  prejudice  to  any 
section  of  the  confederacy. 

Thus  viewing  the  question,  I  stand  here  as  the  humble 
but  zealous  advocate,  not  of  the  interests  of  one  State,  or 
seven  States  only,  but  of  the  whole  Union.  And  never 
before  have  I  felt  more  intensely  the  overpowering  weight 
of  that  share  of  responsibility  which  belongs  to  me  in  these 
deliberations.  'Never  before  have  I  had  more  occasion  than 
I  now  have  to  lament  my  want  of  those  intellectual  powers, 
the  possession  of  which  might  enable  me  to  unfold  to  this 
Senate,  and  to  illustrate  to  this  people  great  truths,  inti- 

*We  omit  some  things  that  would  be  irrelevant  at  present,  but  the  prineipal 
arguments  are  given. 

(62) 


CLAY    ON    THE    AMERICAN    SYSTEM.  63 

mately  connected  with  the  lasting  welfare  of  my  country. 
I  should,  indeed,  sink  overwhelmed  and  subdued  beneath 
the  appalling  magnitude  of  the  task  which  lies  before  me,  if 
I  did  not  feel  myself  sustained  and  fortified  by  a  thorough 
consciousness  of  the  justness  of  the  cause  which  I  have 
espoused,  and  by  a  persuasion,  I  hope  not  presumptuous,  that 
it  has  the  approbation  of  that  Providence  who  has  so  often 
smiled  upon  these  United  States. 

If  the  system  of  protection  be  founded  on  principles 
erroneous  in  theory,  pernicious  in  practice — above  all  if  it 
be  unconstitutional,  as  is  alleged,  it  ought  to  be  forthwith 
abolished,  and  not  a  vestige  of  it  suffered  to  remain.  But, 
before  we  sanction  this  sweeping  denunciation,  let  us  look  a 
little  at  this  system,  its  magnitude,  its  ramifications,  its  dura- 
tion, and  the  high  authorities  which  have  sustained  it.  We 
shall  see  that  its  foes  will  have  accomplished  comparatively 
nothing,  after  having  achieved  their  present  aim  of  breaking 
down  our  iron  foundries,  our  woolen,  cotton,  and  hemp 
manufactories,  and  our  sugar  plantations.  The  destruction 
of  these  would,  undoubtedly,  lead  to  the  sacrifice  of  im- 
mense capital,  the  ruin  of  many  thousands  of  our  fellow 
citizens,  and  incalculable  loss  to  the  whole  community.  But 
their  prostration  would  not  disfigure,  nor  produce  greater 
effect  upon  the  whole  system  of  protection,  in  all  its  branches, 
than  the  destruction  of  the  beautiful  domes  upon  the  capitol 
would  occasion  to  the  magnificent  edifice  which  they  sur- 
mount. Why,  sir,  there  is  scarcely  an  interest,  scarcely  a 
vocation  in  society,  which  is  not  embraced  by  the  beneficence 
of  this  system. 

It  comprehends  our  coasting  tonnage  and  trade,  from 
which  all  foreign  tonnage  is  absolutely  excluded. 

It  includes  all  our  foreign  tonnage,  with  the  inconsidera- 
ble exception  made  by  treaties  of  reciprocity  with  a  few 
foreign  powers. 

It  embraces  our  fisheries,  and  all  our  hardy  and  enterpris- 
ing fishermen. 


64  CLAY    ON    THE   AMERICAN    SYSTEM. 

It  extends  to  almost  every  mechanic  art. 

It  extends  to  all  lower  Louisiana,  the  Delta  of  which 
might  as  well  be  submerged  again  in  the  Gulf  of  Mexico, 
from  which  it  has  been  a  gradual  conquest,  as  now  to  be 
deprived  of  the  protecting  duty  upon  its  great  staple. 

It  affects  the  cotton  planter  himself,  and  the  tobacco  plan- 
ter, both  of  whom  enjoy  protection. 

Such  are  some  of  the  items  of  this  vast  system  of  pro- 
tection, which  it  is  now  proposed  to  abandon.  We  might 
well  pause  and  contemplate,  if  human  imagination  could 
conceive  the  extent  of  mischief  and  ruin  from  its  total  over- 
throw, before  we  proceed  to  the  work  of  destruction.  Its 
duration  is  worthy  also  of  serious  consideration.  Not  to  go 
behind  the  Constitution,  its  date  is  coeval  with  that  instru- 
ment. It  began  on  the  ever  memorable  fourth  day  of  July 
— the  fourth  day  of  July,  1789.  The  second  act  which 
stands  recorded  in  the  statute  book,  bearing  the  illustrious 
signature  of  George  AVashington,  laid  the  corner-stone  of 
the  whole  system.  That  there  might  be  no  mistake  about 
the  matter,  it  was  then  solemnly  proclaimed  to  the  American 
people  and  to  the  world,  that  it  was  necessary  for  the  ' '  en- 
couragement  and  protection  of  manufactures,"  that  duties 
should  be  laid.  It  is  in  vain  to  urge  the  small  amount  of 
the  measure  of  the  protection  then  extended.  The  great 
principle  was  then  established  by  the  fathers  of  the  consti- 
tution, with  the  father  of  his  country  at  their  head.  And  it 
cannot  now  be  questioned,  that,  if  the  government  had  not 
then  been  new  and  the  subject  untried,  a  greater  measure  of 
protection  would  have  been  applied,  if  it  had  been  supposed 
necessary.  Shortly  after,  the  master  minds  of  Jefferson 
and  Hamilton  were  brought  to  act  on  this  interesting  sub- 
ject. Taking  views  of  it  appertaining  to  the  departments  of 
foreign  affairs  and  of  the  treasury,  which  they  respectively 
filled,  they  presented,  severally,  reports  which  yet  remain 
monuments  of  their  profound  wisdom,  and  came  to  the 


CLAY   ON   THE   AMERICAN    SYSTEM.  65 

same  conclusion  of  protection  to  American  industry.  Mr 
Jefferson  argued  that  foreign  restrictions,  foreign  prohibi- 
tions, and  foreign  high  duties,  ought  to  be  met  at  home  by 
American  restrictions,  American  prohibitions,  and  American 
high  duties.  Mr.  Hamilton,  surveying  the  entire  ground, 
and  looking  at  the  inherent  nature  of  the  subject,  treated  it 
with  an  ability,  which,  if  ever  equaled,  has  not  been  sur- 
passed, and  earnestly  recommended  protection. 

The  wars  of  the  French  revolution  commenced  about  this 
period,  and  streams  of  gold  poured  into  the  United  States 
through  a  thousand  channels,  opened  or  enlarged  by  the 
successful  commerce  which  our  neutrality  enabled  us  to 
prosecute.  We  forgot  or  overlooked,  in  the  general  pros- 
perity, the  necessity  of  encouraging  our  domestic  manufac- 
tures. Then  came  the  edicts  of  Napoleon,  and  the  British 
orders  in  council ;  and  our  embargo,  non  intercourse,  non- 
importation, and  war,  followed  in  rapid  succession.  These 
national  measures,  amounting  to  a  total  suspension,  for  the 
period  of  their  duration,  of  our  foreign  commerce,  afforded 
the  most  efficacious  encouragement  to  American  manufac- 
tures; and  accordingly  they  everywhere  sprung  up.  While 
these  measures  of  restriction,  and  this  state  of  war  con- 
tinued, the  manufacturers  were  stimulated  in  their  enter- 
prise by  every  assurance  of  support,  by  public  sentiment, 
and  by  legislative  resolves.  It  was  about  that  period  (1808) 
that  South  Carolina  bore  her  high  testimony  to  the  wisdom 
of  the  policy,  in  an  act  of  her  legislature,  the  preamble  of 
which,  now  before  me,  reads: 

"  Whereas,  the  establishment  and  encouragement  of  domes- 
tic manufactures,  is  conducive  to  the  interests  of  a  State,  by 
adding  new  incentives  to  industry,  and  as  being  the  means  of 
disposing  to  advantage  the  surplus  productions  of  the  agri- 
culturist; and  whereas,  in  the  present  unexampled  state  of 
the  world,  their  establishment  in  our  country  is  not  only 
expedient,  but  politic  in  rendering  us  independent  of  foreign 
nations." 


66  CLAY   ON   THE   AMERICAN   SYSTEM. 

The  legislature,  not  being  competent  to  afford  the  most 
efficacious  aid,  by  imposing  duties  on  foreign  rival  articles, 
proceeded  to  incorporate  a  company. 

Peace,  under  the  treaty  of  Ghent,  returned  in  1815,  but 
there  did  not  return  with  it  the  golden  days  which  preceded 
the  edicts  leveled  at  our  commerce  by  Great  Britain  and 
France.  It  found  all  Europe  tranquilly  resuming  the  arts 
and  business  of  civil  life.  It  found  Europe  no  longer  the 
consumer  of  our  surplus,  and  the  employer  of  our  naviga- 
tion, but  excluding,  or  heavily  burthening,  almost  all  the 
productions  of  our  agriculture,  and  our  rivals  in  manu- 
factures, in  navigation,  and  in  commerce.  It  found  our 
country,  in  short,  in  a  situation  totally  different  from  all  the 
past — new  and  untried.  It  became  necessary  to  adapt  our 
laws,  and  especially  our  laws  of  impost,  to  the  new  circum- 
stances in  which  we  found  ourselves.  Accordingly,  that 
eminent  and  lamented  citizen,  then  at  the  head  of  the 
treasury  (Mr.  Dallas),  was  required,  by  a  resolution  of  the 
House  of  Representatives,  under  date  the  twenty-third  day 
of  February,  1815,  to  prepare  and  report  to  the  succeeding 
session  of  Congress,  a  system  of  revenue  conformable  with 
the  actual  condition  of  the  country.  He  had  the  circle  of 
a  whole  year  to  perform  the  work,  consulted  merchants, 
manufacturers,  and  other  practical  men,  and  opened  an 
extensive  correspondence.  The  report  which  he  made  at 
the  session  of  1816,  was  the  result  of  his  inquiries  and 
reflections,  and  embodies  the  principles  which  he  thought 
applicable  to  the  subject.  It  has  been  said,  that  the  tariff 
of  1816  was  a  measure  of  mere  revenue,  and  that  it  only 
reduced  the  war  duties  to  a  peace  standard.  It  is  true  that 
the  question  then  was,  how  much  and  in  what  way  should 
the  double  duties  of  the  war  be  reduced?  Now,  also,  the 
question  is,  on  what  articles  shall  the  duties  be  reduced  so 
as  to  subject  the  amounts  of  the  future  revenue  to  the 
wants  of  the  government?  Then  it  was  deemed  an  inquiry 


CLAY    ON    THE   AMERICAN    SYSTEM.  67 

of  the  first  importance,  as  it  should  be  now,  how  the  reduc- 
tion should  be  made,  so  as  to  secure  proper  encouragement 
to  our  domestic  industry.  That  this  was  a  leading  object  in 
the  arrangement  of  the  tariff  of  1816,  I  well  remember, 
and  it  is  demonstrated  by  the  language  of  Mr.  Dallas.  He 
says  in  his  report: 

"  There  are  few,  if  any,  governments  which  do  not  regard 
the  establishment  of  domestic  manufactures  as  a  chief  object 
of  public  policy.  The  United  States  have  always  so  regarded 
it.  The  demands  of  the  country,  while  the  acquisitions  of 
supplies  from  foreign  nations  was  either  prohibited  or  im- 
practicable, may  have  afforded  sufficient  inducement  for  this 
investment  of  capital,  and  this  application  of  labor;  but  the 
inducement,  in  its  necessary  extent,  must  fail  when  the  day 
of  competition  returns.  Upon  that  change  in  the  condition 
of  the  country,  the  preservation  of  the  manufactures,  which 
private  citizens  under  favorable  auspices  have  constituted 
the  property  of  the  nation,  becomes  a  consideration  of  gen- 
eral policy,  to  be  resolved  by  a  recollection  of  past  embar- 
rassments ;  by  the  certainty  of  an  increased  difficulty  of 
reinstating,  upon  any  emergency,  the  manufactures  which 
shall  be  allowed  to  perish  and  pass  away,"  etc. 

The  measure  of  protection  which  he  proposed  was  not 
adopted,  in  regard  to  some  leading  articles,  and  there  was 
great  difficulty  in  ascertaining  what  it  ought  to  have  been. 
But  the  principle  was  then  distinctly  asserted  and  fully 
sanctioned. 

The  subject  of  the  American  system  was  again  brought 
up  in  1820,  by  the  bill  reported  by  the  chairman  of  the  com- 
mittee  of  manufactures,  now  a  member  of  the  bench  of  the 
Supreme  Court  of  the  United  States,  and  the  principle  was 
successfully  maintained  by  the  representatives  of  the  people; 
but  the  bill  which  they  passed  was  defeated  in  the  Senate. 
It  was  revived  in  1824;  the  whole  ground  carefully  and 
deliberately  explored,  and  the  bill  then  introduced,  receiving 


68  CLAY   ON    THE   AMERICAN   SYSTEM. 

all  the  sanctions  of  the  Constitution,  became  the  law  of  the 
land.  An  amendment  of  the  system  was  proposed  in  1828, 
to  the  history  of  which  I  refer  with  no  agreeable  recollec- 
tions. The  bill  of  that  year,  in  some  of  its  provisions,  was 
framed  on  principles  directly  adverse  to  the  declared  wishes 
of  the  friends  of  the  policy  of  protection.  I  have  hear,d, 
without  vouching  for  the  fact,  that  it  was  so  framed  upon 
the  advice  of  a  prominent  citizen,  now  abroad,  with  the  view 
of  ultimately  defeating  the  bill,  and  with  assurances  that, 
being  altogether  unacceptable  to  the  friends  of  the  Ameri- 
can system,  the  bill  would  be  lost.  Be  that  as  it  may,  the 
most  exceptional  features  of  the  bill  were  stamped  upon  it, 
against  the  earnest  remonstrances  of  the  friends  of  the  sys- 
tem, by  the  votes  of  southern  members,  upon  a  principle,  I 
think,  as  unsound  in  legislation  as  it  is  reprehensible  in 
ethics.  The  bill  was  passed,  notwithstanding  all  this,  it 
having  been  deemed  better  to  take  the  bad  along  with  the 
good  which  it  contained,  than  reject  it  altogether.  Subse- 
quent legislation  has  corrected  the  error  then  perpetrated, 
but  still  that  measure  is  vehemently  denounced  by  gentle- 
men who  contributed  to  make  it  what  it  was. 

Thus,  sir,  has  this  great  system  of  protection  been  gradu- 
ally built,  stone  upon  stone,  and  step  by  step,  from  the  fourth 
of  July,  1789,  down  to  the  present  period.  In  every  stage 
of  its  progress  it  has  received  the  deliberate  sanction  of 
Congress.  A  vast  majority  of  the  people  of  the  United 
States  has  approved  and  continue  to  approve  it.  Every  chief 
magistrate  of  the  United  States,  from  Washington  to  the 
present,  in  some  form  or  other,  has  given  to  it  the  authority 
of  his  name;  and  however  the  opinions  of  the  existing 
President  are  interpreted  south  of  Mason  and  Dixon's  line, 
on  the  north  they  are  at  least  understood  to  favor  the  estab- 
lishment of  a  judicious  tariff. 

The  question,  therefore,  which  we  are  now  called  upon  to 
determine,  is  not  whether  we  shall  establish  a  new  and 


CLAY   ON    THE    AMERICAN    SYSTEM.  69 

doubtful  system  of  policy,  just  proposed,  and  for  the  first 
time  presented  to  our  consideration,  but  whether  we  shall 
break  down  and  destroy  a  long-established  system,  patiently 
and  carefully  built  up  and  sanctioned,  during  a  series  of 
years,  again  and  again,  by  the  nation  and  its  highest  and 
most  revered  authorities.  Are  we  not  bound  deliberately 
to  consider  whether  we  can  proceed  to  this  work  of  destruc- 
tion without  a  violation  of  the  public  faith?  The  people  of 
the  United  States  have  justly  supposed  that  the  policy  of 
protecting  their  industry  against  foreign  legislation  and 
foreign  industry  was  fully  settled,  not  by  a  single  act,  but  by 
repeated  and  deliberate  acts  of  government,  performed  at 
distant  and  frequent  intervals.  In  full  confidence  that  the 
policy  was  firmly  and  unchangeably  fixed,  thousands  upon 
thousands  have  invested  their  capital,  purchased  a  vast 
amount  of  real  and  other  estate,  made  permanent  establish- 
ments, and  accommodated  their  industry.  Can  we  expose 
to  utter  and  irretrievable  ruin  this  countless  multitude, 
without  justly  incurring  the  reproach  of  violating  the 
national  faith? 

Such  are  the  origin,  duration,  extent,  and  sanctions  of  the 
policy  which  we  are  now  called  upon  to  subvert.  Its  bene- 
ficial effects,  although  they  may  vary  in  degree,  have  been 
felt  in  all  parts  of  the  Union.  To  none,  I  verily  believe, 
has  it  been  prejudicial.  In  the  North,  everywhere,  testi- 
monials are  borne  to  the  high  prosperity  which  it  has  dif- 
fused. There,  all  branches  of  industry  are  animated  and 
flourishing.  Commerce,  foreign  and  domestic,  active;  cities 
and  towns  springing  up,  enlarging,  and  beautifying;  naviga- 
tion fully  and  profitably  employed,  and  the  whole  face  of 
the  country  smiling  with  improvement,  cheerfulness,  and 
abundance. 

When  gentlemen  have  succeeded  in  their  design  of  an 
immediate  or  gradual  destruction  of  the  American  system, 
what  is  their  substitute?  Free  trade!  Free  trade!  The  call 


70  CLAY   ON    THE   AMERICAN    SYSTEM. 

for  free  trade  is  as  unavailing  as  the  cry  of  a  spoiled  child, 
in  its  nurse's  arms,  for  the  moon,  or  the  stars  that  glitter  in 
the  firmament  ,of  heaven.  It  never  has  existed,  it  never 
will  exist.  Trade  implies  at  least  two  parties.  To  be  free, 
it  should  be  fair,  equal,  and  reciprocal.  But  if  we  throw 
our  ports  wide  open  to  the  admission  of  foreign  productions, 
free  of  all  duty,  what  ports  of  any  other  foreign  nation  shall 
we  find  open  to  the  free  admission  of  our  surplus  products? 
We  may  break  down  all  barriers  to  free  trade  on  our  part, 
but  the  work  will  not  be  complete  until  foreign  powers  shall 
have  removed  theirs.  There  would  be  freedom  on  one  side, 
and  restrictions,  prohibitions,  and  exclusions  on  the  other. 
The  bolts,  and  the  bars,  and  the  chains  of  all  other  nations  will 
remain  undisturbed.  It  is,  indeed,  possible,  that  our  indus- 
try and  commerce  would  accommodate  themselves  to  this 
unequal  and  unjust  state  of  things;  for,  such  is  the  flexi- 
bility of  our  nature,  that  it  bends  itself  to  all  circumstances. 
The  wretched  prisoner  incarcerated  in  a  jail,  a.fter  a  long 
time  becomes  reconciled  to  his  solitude,  and  regularly  notches 
down  the  passing  days  of  his  confinement. 

Gentlemen  deceive  themselves.  It  is  not  free  trade  that 
they  are  recommending  to  our  acceptance.  It  is,  in  effect, 
the  British  colonial  system  that  we  are  invited  to  adopt;  and, 
if  their  policy  prevail,  it  will  lead  substantially  to  the  re- 
colonization  of  these  States,  under  the  commercial  dominion 
of  Great  Britain.  And  whom  do  we  find  some  of  the  prin- 
cipal supporters,  out  of  Congress,  of  this  foreign  system? 
Mr.  President,  there  are  some  foreigners  who  always  remain 
exotics,  and  never  become  naturalized  in  our  country;  while, 
happily,  there  are  many  others  who  readily  attach  themselves 
to  our  principles  and  our  institutions.  The  honest,  patient, 
and  industrious  German  readily  unites  with  our  people, 
establishes  himself  upon  some  of  our  fat  land,  fills  his  capa- 
cious barn,  and  enjoys  in  tranquility  the  abundant  fruits  which 
his  diligence  gathers  around  him,  always  ready  to  fly  to  the 


CLAY   ON   THE    AMERICAN    SYSTEM.  71 

standard  of  his  adopted  country,  or  of  its  laws,  when  called 
by  the  duties  of  patriotism.  The  gay,  the  versatile,  the 
philosophic  Frenchman,  accommodating  himself  cheerfully 
to  all  the  vicissitudes  of  life,  incorporates  himself  without 
difficulty  in  our  society.  But,  of  all  foreigners,  none  amal- 
gamate themselves  so  quickly  with  our  people  as  the  natives 
of  the  Emerald  Isle.  In  some  of  the  visions  which  have 
passed  through  my  imagination,  I  have  supposed  that  Ire- 
land was  originally  part  and  parcel  of  this  continent,  and 
that,  by  some  extraordinary  convulsion  of  nature,  it  was 
torn  from  America,  and  drifting  across  the  ocean,  was 
placed  in  the  unfortunate  vicinity  of  Great  Britain.  The 
same  open-heartedness;  the  same  generous  hospitality;  the 
same  careless  and  uncalculating  indifference  about  human 
life,  characterize  the  inhabitants  of  both  countries.  Ken- 
tucky has  been  sometimes  called  the  Ireland  of  America. 
And  I  have  no  doubt,  that  if  the  current  of  emigration 
were  reversed,  and  set  from  America  upon  the  shores  of 
Europe,  instead  of  bearing  from  Europe  to  America,  every 
American  emigrant  to  Ireland  would  there  find,  as  every 
Irish  emigrant  here  finds,  a  hearty  welcome  and  a  happy 
home! 

But  I  have  said  that  the  system  nominally  called  "free 
trade,"  so  earnestly  and  eloquently  recommended  to  our 
adoption,  is  a  mere  revival  of  the  British  colonial  system, 
forced  upon  us  by  Great  Britain  during  the  existence  of  our 
colonial  vassalage.  The  whole  system  is  fully  explained  and 
illustrated  in  a  work  published  as  far  back  as  the  year  1750, 
entitled  "  The  Trade  and  Navigation  of  Great  Britain  Con- 
sidered by  Joshua  Gee,"  with  extracts  from  which  I  have 
been  furnished  by  the  diligent  researches  of  a  friend.  It 
will  be  seen  from  these,  that  the  South  Carolina  policy  now 
is  identical  with  the  long-cherished  policy  of  Great  Britain, 
which  remains  the  same  as  it  was  when  the  thirteen  colonies 
were  part  of  the  British  empire. 


72  CLAY   ON    THE    AMERICAN    SYSTEM. 

I  regret,  Mr.  President,  that  one  topic  has,  I  think, 
unnecessarily  been  introduced  into  this  debate.  I  allude  to 
the  charge  brought  against  the  manufacturing  system,  as 
favoring  the  growth  of  aristocracy.  If  it  were  true,  would 
gentlemen  prefer  supporting  foreign  accumulations  of  wealth, 
by  that  description  of  industry,  rather  than  in  their  own 
country?  But  is  it  correct?  The  joint  stock  companies  of 
the  North,  as  I  understand  them,  are  nothing  more  than 
associations,  sometimes  of  hundreds,  by  means  of  which  the 
small  earnings  of  many  are  brought  into  a  common  stock, 
and  the  associates,  obtaining  corporate  privileges,  are  enabled 
to  prosecute,  under  one  superintending  head,  their  business 
to  better  advantage.  Nothing  can  be  more  essentially 
democratic  or  better  devised  to  counterpoise  the  influence 
of  individual  wealth.  In  Kentucky,  almost  every  manufac- 
tory known  to  me  is  in  the  hands  of  enterprising  and  self- 
made  men,  who  have  acquired  whatever  wealth  they  possess 
by  patient  and  diligent  labor.  Comparisons  are  odious,  and 
but  in  defense,  would  not  be  made  by  me.  But  is  there 
more  tendency  to  aristocracy  in  a  manufactory  supporting 
hundreds  of  freemen,  or  in  a  cotton  plantation,  with  its  not 
less  numerous  slaves,  sustaining  perhaps  only  two  white 
families  —  that  of  the  master  and  overseer? 

I  pass,  with  pleasure,  from  this  disagreeable  topic,  to  two 
general  propositions,  which  cover  the  entire  ground  of  debate. 
The  first  is,  that  under  the  operation  of  the  American  sys- 
tem, the  objects  which  it  protects  and  fosters  are  brought  to 
the  consumer  at  cheaper  prices  than  they  commanded  prior 
to  its  introduction,  or,  than  they  would  command  if  it  did 
not  exist.  If  that  be  true,  ought  not  the  country  to  be  con- 
tented and  satisfied  with  the  system,  unless  the  second  propo- 
sition, which  I  mean  presently  also  to  consider,  is  unfounded? 
And  that  is,  that  the  tendency  of  the  system  is  to  sustain, 
and  that  it  has  upheld  the  prices  of  all  our  agricultural  and 
other  produce,  including  cotton. 


CLAY   ON   THE   AMERICAN   SYSTEM.  73 

And  is  the  fact  not  indisputable,  that  all  essential  objects 
of  consumption  affected  by  the  tariff,  are  cheaper  and  better 
since  the  act  of  1824,  than  they  were  for  several  years  prior 
to  that  law?  I  appeal  for  its  truth  to  common  observation, 
and  to  all  practical  msn.  I  appeal  to  the  farmer  of  the  coun- 
try, whether  he  does  not  purchase  on  better  terms  his  iron, 
salt,  brown  sugar,  cotton  goods,  and  woolens,  for  his  labor- 
ing  people?  And -I  ask  the  cotton  planter  if  he  has  not  been 
better  and  more  cheaply  supplied  with  his  cotton  bagging? 
In  regard  to  this  latter  article,  the  gentleman  from  South 
Carolina  was  mistaken  in  supposing  that  I  complained  that, 
tinder  the  existing  duty  the  Kentucky  manufacturer  could 
not  compete  with  the  Scotch.  The  Kentuckian  furnishes  a 
more  substantial  and  cheaper  article,  and  at  a  more  uniform 
and  regular  price.  But  it  was  the  frauds,  the  violation  of 
law,  of  which  I  did  complain  ;  not  smuggling,  in  the  com- 
mon sense  of  that  practice,  which  has  something  bold,  dar- 
ing, and  enterprising  in  it,  but  mean,  barefaced  cheating,  by 
fraudulent  invoices  and  false  denomination. 

I  plant  myself  upon  this  fact,  of  cheapness  and  superiority, 
as  upon  impregnable  ground.  Gentlemen  may  tax  their 
ingenuity  and  produce  a  thousand  speculative  solutions  to 
the  fact,  but  the  fact  itself  will  remain  undisturbed. 

This  brings  me  to  consider  what  I  apprehend  to  have  been 
the  most  efficient  of  all  the  causes  in  the  reduction  of  the 
prices  of  manufactured  articles — and  that  is  COMPETITION. 
By  competition,  the  total  amount  of  the  supply  is  increased, 
and  by  increase  of  the  supply,  a  competition  in  the  sale  ensues, 
and  this  enables  the  consumer  to  buy  at  lower  rates.  Of  all 
human  powers  operating  on  the  affairs  of  mankind,  none  is 
greater  than  that  of  competition.  It  is  action  and  re-action. 
It  operates  between  individuals  in  the  same  nation,  and  be- 
tween different  nations.  It  resembles  the  meeting  of  the 
mountain  torrent,  grooving  by  its  precipitous  motion,  its  own 
channel,  and  ocean's  tide.  Unopposed,  it  sweeps  everything 
4 


74  CLAY    ON   THE   AMERICAN    SYSTEM. 

before  it ;  but,  counterpoised,  the  waters  become  calm,  safe, 
and  regular.  It  is  like  the  segments  of  a  circle  or  an  arch  ,- 
taken  separately,  each  is  nothing ;  but  in  their  combination 
they  produce  efficiency,  symmetry,  and  perfection.  By  the 
American  system,  this  vast  power  has  been  excited  in 
America,  and  brought  into  being  to  act  in  co-operation  and 
collision  with  European  industry.  Europe  acts  within  itself, 
and  with  America ;  and  America  acts  within  itself,  and  with 
Europe.  The  consequence  is,  the  reduction  of  prices  in  both 
hemispheres.  Nor  is  it  fair  to  argue  from  the  reduction  of 
prices  in  Europe,  to  her  own  presumed  skill  and  labor,  exclu- 
sively. We  affect  her  prices,  and  she  affects  ours.  This  must 
always  be  the  case,  at  least  in  reference  to  any  articles  as  to 
which  there  is  not  a  total  non-intercourse  ;  and  if  our  indus- 
try, by  diminishing  the  demand  for  her  supplies,  should  pro- 
duce a  diminution  in  the  price  of  those  supplies,  it  would  be 
very  unfair  to  ascribe  that  reduction  to  her  ingenuity  instead 
of  placing  it  to  the  credit  of  our  own  skill  and  excited 
industry. 

The  great  law  of  price  is  determined  by  supply  and  de- 
mand. Whatever  affects  either,  affects  the  price.  If  the 
supply  is  increased,  the  demand  remaining  the  same,  the  price 
declines  ;  if  the  demand  is  increased,  the  supply  remaining 
the  same,  the  price  advances ;  if  both  supply  and  demand 
are  undiminished.  the  price  is  stationary,  and  the  price  is 
influenced  exactly  in  proportion  to  the  degree  of  disturbance 
to  the  demand  or  supply.  It  is  therefore  a  great  error  to 
suppose  that  an  existing  or  new  duty  necessarily  becomes  a 
component  element  to  its  exact  amount  of  price.  If  the 
proportion  of  demand  and  supply  are  varied  by  the  duty, 
either  in  augmenting  the  supply,  or  diminishing  the  demand, 
or  vice  versa,  price  is  affected  to  the  extent  of  that  variation. 
But  the  duty  never  becomes  an  integral  part  of  the  price, 
except  in  the  instances  where  the  demand  and  the  supply 
remain  after  the  duty  is  imposed,  precisely  what  they  were 


CLAY    ON    THE    AMERICAN    SYSTEM.  75 

before,  or  the  demand  is  increased,  and  the  supply  remains 
stationary. 

Competition,  therefore,  wherever  existing,  whether  at 
home  or  abroad,  is  the  parent  cause  of  cheapness.  If  a  high 
duty  excites  production  at  home,  and  the  quantity  of  the 
domestic  article  exceeds  the  amount  which  had  been  pre- 
viously imported  the  price  will  fall.  This  accounts  for  an 
extraordinary  fact  stated  by  a  Senator  from  Missouri.  Three 
cents  were  laid  as  a  duty  upon  a  pound  of  lead,  by  the  act 
of  1828.  The  price  at  Galena,  and  the  other  lead  mines, 
afterwards  fell  to  one  and  a  half  cents  per  pound.  Now  it 
is  obvious  that  the  duty  did  not,  in  this  case,  enter  into  the 
price:  for  it  was  twice  the  amount  of  the  price.  What  pro- 
duced the  fall?  It  was  stimulated  production  at  home,  excited 
by  the  temptation  of  the  exclusive  possession  of  the  home 
market.  This  state  of  things  could  not  last.  Men  would 
not  continue  an  unprofitable  pursuit;  some  abandoned  the 
business,  or  the  total  quantity  produced  was  diminished,  and 
living  prices  have  been  the  consequence.  But,  break  down 
the  domestic  supply,  place  us  again  in  a  state  of  dependence 
on  the  foreign  source,  and  can  it  be  doubted  that  we  should 
ultimately  have  to  supply  ourselves  at  dearer  rates?  It  is 
not  fair  to  credit  the  foreign  market  with  the  depression  of 
prices  produced  there  by  the  influence  of  our  competition. 
Let  the  competition  be  withdrawn,  and  their  prices  would 
instantly  rise. 

But,  it  is  argued  that  if,  by  the  skill,  experience,  and  per- 
fection which  we  have  acquired  in  certain  branches  of 
manufacture,  they  can  be  made  as  cheap  as  similar  articles 
abroad,  and  enter  fairly  into  competition  with  them,  why 
not  repeal  the  duties  as  to  those  articles?  And  why  should 
we?  Assuming  the  truth  of  the  supposition  the  foreign 
article  would  not  be  introduced  in  the  regular  course  of 
trade,  but  would  remain  excluded  by  the  possession  of  the 
home  market,  which  the  domestic  article  had  obtained.  The 


76  CLAY   ON   THE   AMERICAN   SYSTEM. 

• 

repeal,  therefore,  would  have  no  legitimate  effect.  But 
might  not  the  foreign  article  be  imported  in  vast  quantities, 
to  glut  our  markets,  break  down  our  establishments,  and 
•ultimately  to  enable  the  foreigner  to  monopolize  the  supply 
of  our  consumption?  America  is  the  greatest  foreign  market 
for  European  manufactures.  It  is  that  to  which  European 
attention  is  constantly  directed.  If  a  great  house  becomes 
bankrupt  there,  its  storehouses  are  emptied,  and  the  goods 
are  shipped  to  America,  where,  in  consequence  of  our 
auctions,  and  our  custom-house  credits,  the  greatest  facilities 
are  afforded  in  the  sale  of  them.  Combinations  among 
manufacturers  might  take  place,  or  even  the  operations  of 
foreign  governments  might  be  directed  to  the  destruction  of 
our  establishments.  A  repeal,  therefore,  of  our  protecting 
duty,  from  some  one  or  all  of  these  causes,  would  be  followed 
by  flooding  the  country  with  the  foreign  fabric,  surcharging 
the  market,  reducing  the  price,  and  a  complete  prostration 
of  our  manufactories;  after  which  the  foreigner  would 
leisurely  look  about  to  indemnify  himself  in  the  increased 
prices  which  he  would  be  enabled  to  command  by  his 
monopoly  of  the  supply  of  our  consumption.  "What 
American  citizen,  after  the  government  had  displayed  this 
vacillating  policy,  would  be  again  tempted  to  place  the 
smallest  confidence  in  the  public  faith,  and  adventure  once 
more  in  this  branch  of  industry? 

Gentlemen  have  allowed  to  the  manufacturing  portions  of 
the  community  no  peace;  they  have  been  constantly  threat- 
ened with  the  overthrow  of  the  American  System.  From 
the  year  1820,  if  not  from  1816,  down  to  this  time,  they 
have  been  held  in  a  condition  of  constant  alarm  and 
insecurity.  Nothing  is  more  prejudicial  to  the  great  interests 
of  a  nation  than  unsettled  and  varying  policy.  Although 
every  appeal  to  the  national  legislature  has  been  responded 
to  in  conformity  with  the  wishes  and  sentiments  of  the  great 
majority  of  the  people,  measures  of  protection  have  only 


CLAY   ON   THE   AMERICAN   SYSTEM.  7? 

been  carried  by  such  small  majorities  as  to  excite  "hopes  on 
the  one  hand,  and  fears  on  the  other.  Let  the  country 
breathe,  let  its  vast  resources  be  developed,  let  its  energies 
be  fully  put  forth,  let  it  have  tranquility,  and  my  word  for 
it,  the  degree  of  perfection  in  the  arts  which  it  will  exhibit 
will  be  greater  than  that  which  has  been  presented,  astonish- 
ing as  our  progress  has  been.  Although  some  branches  of 
oar  manufactures  might,  and  in  foreign  markets  now  do, 
fearlessly  contend  with  similar  foreign  fabrics,  there  are 
many  others  yet  in  their  infancy,  struggling  with  the  diffi- 
culties which  encompass  them.  "We  should  look  at  the 
whole  system,  and  recollect  that  time,  when  we  contemplate 
the  great  movements  of  a  nation,  is  very  different  from  the 
short  period  which  is  allotted  for  the  duration  of  individual 
life.  The  honorable  gentleman  from  South  Carolina  well 
and  eloquently  said,  in  1824,  "No  great  interest  of  any 
country  ever  yet  grew  up  in  a  day;  no  new  branch  of 
industry  can  become  firmly  and.  profitably  established  but  in 
a  long  course  of  years;  every  thing,  indeed,  great  or  good, 
is  matured  by  slow  degrees:  that  which  attains  a  speedy 
maturity  is  of  small  value,  and  is  destined  to  a  brief  exist- 
ence. It  is  the  order  of  Providence,  that  powers  gradually 
developed  shall  alone  attain  permanency  and  perfection. 
Thus  must  it  be  with  our  national  institutions,  and  national 
character  itself." 

I  feel  most  sensibly,  Mr.  President,  how  much  I  have 
trespassed  upon  the  Senate.  My  apology  is  a  deep  and 
deliberate  conviction,  that  the  great  cause  under  debate' 
involves  the  prosperity  and  the  destiny  of  the  Union.  But 
the  best  requital  I  can  make,  for  the  friendly  indulgence 
which  has  been  extended  to  me  by  the  Senate,  and  for 
which  I  shall  ever  retain  sentiments  of  lasting  gratitude,  is 
to  proceed  with  as  little  delay  as  practicable,  to  the  conclu- 
sion of  a  discourse  which  has  not  been  more  tedious  to  the 
Senate  than  exhausting  to  me.  I  have  now  to  consider  the 


78  CLAY   ON   THE   AMERICAN   SYSTEM. 

remaining  of   the  two  propositions  which.  I  have   already 
announced.     That  is: 

Secondly.  That  under  the  operation  of  the  American 
system,  the  products  of  our  agriculture  command  a  higher 
price  than  they  would  do  without  it,  by  the  creation  of  a 
home  market;  and  by  the  augmentation  of  wealth  produced 
by  manufacturing  industry,  which  enlarges  our  powers  of 
consumption,  both  of  domestic  and  foreign  articles.  The 
importance  of  the  home  market  is  among  the  established 
maxims  which  are  universally  recognized  by  all  writers  and 
all  men.  However  some  may  differ  as  to  the  relative 
advantages  of  the  foreign  and  the  home  market,  none  deny 
to  the  latter  great  value  and  high  consideration.  It  is  nearer 
to  us;  beyond  the  control  of  foreign  legislation;  and  undis- 
turbed by  those  vicissitudes  to  which  all  international  inter- 
course  is  more  or  less  exposed.  The  most  stupid  are  sensible 
of  the  benefit  of  a  residence  in  the  vicinity  of  a  large  manu- 
factory, or  of  a  market  town,  of  a  good  road,  or  of  a 
navigable  stream,  which  connects  their  farms  with  some 
great  capital.  If  the  pursuits  of  all  men  were  perfectly  the 
same,  although  they  would  be  in  possession  of  the  greatest 
abundance  of  the  particular  produce  of  their  industry,  they 
might,  at  the  same  time,  be  in  extreme  want  of  other  neces- 
sary articles  of  human  subsistence.  The  uniformity  of  the 
general  occupation  would  preclude  all  exchanges,  all  com- 
merce. It  is  only  in  the  diversity  of  the  vocations  of  the 
members  of  a  community  that  the  means  can  be  found  for 
those  salutary  exchanges  which  conduce  to  the  general 
prosperity.  And  the  greater  that  diversity,  the  more  exten- 
sive and  the  more  animating  is  the  circle  of  exchange. 
Even  if  foreign  markets  were  freely  and  widely  open  to  the 
reception  of  our  agricultural  produce,  from  its  bulky  nature, 
and  the  distance  of  the  interior,  and  the  dangers  of  the 
ocean,  large  portions  of  it  could  never  profitably  reach  the 
foreign  market.  But  let  us  quit  this  field  of  theory,  clear 


CLAY    ON    THE    AMERICAN    SYSTEM.  79 

as  it  is,  and  look  at  the  practical  operation  of  the  system  of 
protection,  beginning  with  the  most  valuable  staple  of  our 
agriculture. 

But  if  all  this  reasoning  were  totally  fallacious — if  the 
price  of  manufactured  articles  were  really  higher,  under  the 
American  system,  than  without  it,  I  should  still  argue  that 
high  or  low  prices  were  themselves  relative — relative  to  the 
ability  to  pay  them.  It  is  in  vain  to  tempt,  to  tantalize  us 
with  the  lower  prices  of  European  fabrics  than  our  own,  if 
we  have  nothing  wherewith  to  purchase  them.  If,  by  the 
home  exchanges,  we  can  be  supplied  with  necessary,  even  if 
they  are  dearer  and  worse,  articles  of  American  production 
than  the  foreign,  it  is  better  than  not  to  be  supplied  at  all. 
And  how  would  the  large  portion  of  our  country  which  I 
have  described  be  supplied,  but  for  the  home  exchanges? 
A  poor  people,  destitute  of  wealth  or  of  exchangeable  com- 
modities, has  nothing  to  purchase  foreign  fabrics.  To  them 
they  are  equally  beyond  their  reach,  whether  their  cost  be  a 
dollar  or  a  guinea.  It  is  in  this  view  of  the  matter  that 
Great  Britain,  by  her  vast  wealth — her  excited  and  protected 
industry — is  enabled  to  bear  a  burden  of. taxation  which, 
when  compared  to  that  of  other  nations,  appears  enormous; 
but  which,  when  her  immense  riches  are  compared  to  theirs, 
is  light  and  trivial.  The  gentleman  from  South  Carolina 
has  drawn  a  lively  and  flattering  picture  of  our  coasts,  bays, 
rivers,  and  harbors;  and  he  argues  that  these  proclaimed 
the  design  of  Providence,  that  we  should  be  a  commercial 
people.  I  agree  with  him.  We  differ  only  as  to  the  means. 
He  would  cherish  the  foreign,  and  neglect  the  internal  trade. 
I  would  foster  both.  What  is  navigation  without  ships,  or 
ships  without  cargoes?  By  penetrating  the  bosoms  of  our 
mountains,  and  extracting  from  them  their  precious  treas- 
ures; by  cultivating  the  earth,  and  securing  a  home  market 
for  its  rich  and  abundant  products;  by  employing  the  water 
power  with  which  we  are  blessed;  by  stimulating  and 


80  CLAY   ON   THE   AMERICAN   SYSTEM. 

protecting  our  native  industry,  in  all  its  forms;  we  shall  but 
nourish  and  promote  the  prosperity  of  commerce,  foreign 
and  domestic. 

I  have  hitherto  considered  the  question  in  reference  only 
to  a  state  of  peace;  but  a  season  of  war  ought  not  to  be 
entirely  overlooked.  We  have  enjoyed  near  twenty  years 
of  peace;  but  who  can  tell  when  the  storm  of  war  shall 
again  break  forth?  Have  we  forgotten  so  soon,  the  priva- 
tions to  which  not  merely  our  brave  soldiers  and  our  gallant 
tars  were  subjected,  but  the  whole  community,  during  the 
last  war,  for  the  want  of  absolute  necessaries?  To  what  an 
enormous  price  they  rose!  And  how  inadequate  the  supply 
was,  at  any  price!  The  statesman  who  justly  elevates  his 
views,  will  look  behind,  as  well  as  forward,  and  at  the  exist- 
ing state  of  things;  and  he  will  graduate  the  policy  which 
he  recommends,  to  all  the  probable  exigencies  which  may 
arise  in  the  Kepublic.  Taking  this  comprehensive  range,  it 
would  be  easy  to  show  that  the  higher  prices  of  peace,  if 
prices  were  higher  in  peace,  were  more  than  compensated  by 
the  lower  prices  of  war,  during  which  supplies  of  all  essen- 
tial articles  are  indispensable  to  its  vigorous,  effectual,  and 
glorious  prosecution.  I  conclude  this  part  of  the  argument 
with  the  hope  that  my  humble  exertions  have  not  been 
altogether  unsuccessful  in  showing — 

1.  That  the  policy  which  we  have  been  considering  ought 
to  continue  to  be  regarded  as  the  genuine  American  system. 

2.  That   the  free   trade   system,  which   is  proposed  as 
its  substitute,  ought  really  to  be  considered  as  the  British 
Colonial  system. 

3.  That  the  American  system  is  beneficial  to  all  parts  of 
the  Union,  and   absolutely  necessary  to   much   the   larger 
portion. 

4.  That  the  price  of  the  great  staple  of  cotton,  and  of 
all  our  chief  productions  of  agriculture,  has  been  sustained 
and  upheld,  and  a  decline  averted  by  the  protective  system. 


CLAY   ON   THE   AMERICAN   SYSTEM.  81 

5.  That  if  the  foreign  demand  for  cotton  has  been  at  all 
diminished  by  the  operation  of  that  system,  the  diminution 
has  been  more  than  compensated  in  the  additional  demand 
created  at  home. 

6.  That  the  constant  tendency  of  the  system,  by  creating 
competition  among  ourselves,  and  between  American  and 
European  industry,  reciprocally  acting  upon  each  other,  is 
to  reduce  prices  of  manufactured  objects. 

7.  That  in  point  of  fact,  objects  within  the  scope  of  the 
policy  of  protection  have  greatly  fallen  in  price. 

8.  That  if,   in   a   season  of    peace,    these   benefits   are 
experienced,  in  a  season  of  war,  when  the  foreign  supply 
might  be  cut  off,  they  would  be  much  more  extensively  felt. 

9.  And  finally,  that  the  substitution  of  the  British  colo- 
nial system  for  the  American    system,  without   benefiting 
any  section  of   the  Union,   by  subjecting  us  to  a  foreign 
legislation,  regulated  by  foreign  interests,  would  lead  to  the 
prostration  of   our  manufactures,  general  impoverishment, 
and  ultimate  ruin. 

The  danger  to  our  Union  does  not  lie  on  the  side  of  persist- 
ence in  the  American  system,  but  on  that  of  its  abandon- 
ment. If,  as  I  have  supposed  and  believe,  the  inhabitants 
of  all  north  and  east  of  James  river,  and  all  west  of  the 
mountains,  including  Louisiana,  are  deeply  interested  in  the 
preservation  of  that  system,  would  they  be  reconciled  to 
its  overthrow?  Can  it  be  expected  that  two-thirds,  if  not 
three-fourths,  of  the  people  of  the  United  States,  would 
consent  to  the  destruction  of  a  policy,  believed  to  be  indis- 
pensably necessary  to  their  prosperity?  'When,  too,  the 
sacrifice  is  made  at  the  instance  of  a  single  interest,  which 
they  verily  believe  will  not  be  promoted  by  it?  In  estimating 
the  degree  of  peril  which  may  be  incident  to  two  opposite 
courses  of  human  policy,  the  statesman  would  be  short- 
sighted who  should  content  himself  with  viewing  only  the 
evils,  real  or  imaginary,  which  belong  to  that  course  which 
is  in  practical  operation.  He  should  lift  himself  up  to  the 
4* 


82  CLAY   ON    THE   AMERICAN    SYSTEM. 

contemplation  of  those  greater  and  more  certain  dangers 
which  might  inevitably  attend  the  adoption  of  the  alterna- 
tive, course.  What  would  be  the  condition  of  this  Union, 
if  Pennsylvania  and  New  York,  those  mammoth  members  of 
our  confederacy,  were  firmly  persuaded  that  their  industry 
was  paralyzed,  and  their  prosperity  blighted,  by  the  enforce- 
ment of  the  British  colonial  system,  under  the  delusive  name 
of  free  trade?  They  are  now  tranquil  and  happy,  and  con- 
tented, conscious  of  their  welfare,  and  feeling  a  salutary  and 
rapid  circulation  of  the  products  of  home  manufactures  and 
home  industry  throughout  all  their  great  arteries.  But  let 
that  be  checked,  let  them  feel  that  a  foreign  system  is  to 
predominate,  and  the  sources  of  their  subsistence  and  com- 
fort dried  up;  let  New  England  and  the  west,  and  the 
middle  States,  all  feel  that  they  too  are  the  victims  of  a 
mistaken  policy,  and  let  these  vast  portions  of  our  country 
despair  of  any  favorable  change,  and  then  indeed  might  we 
tremble  for  the  continuance  and  safety  of  this  Union! 

And  now,  sir,  I  would  address  a  few  words  to  the  friends 
of  the  American  system  in  the  Senate.  The  revenue  must 
— ought  to  be  reduced.  The  country  will  not,  after,  by  the 
payment  of  the  public  debt,  ten  or  twelve  millions  of  dollars 
become  unnecessary,  bear  such  an  annual  surplus.  Its 
distribution  would  form  a  subject  of  perpetual  contention. 
Some  of  the  opponents  of  the  system  understand  the  strata- 
gem by  which  to  attack  it,  and  are  shaping  their  course 
accordingly.  It  is  to  crush  the  system  by  the  accumulation 
of  revenue,  and  by  the  effort  to  persuade  the  people  that 
they  are  unnecessarily  taxed,  while  those  would  really  tax 
them  who  would  break  up  the  native  sources  of  supply,  and 
render  them  dependent  upon  the  foreign.  But  the  revenue 
ought  to  be  reduced,  so  as  to  accommodate  it  to  the  fact  of 
the  payment  of  the  public  debt.  And  the  alternative  is  or 
may  be,  to  preserve  the  protecting  system,  and  repeal  the 
duties  on  the  unprotected  articles,  or  to  preserve  the  duties 
on  unprotected  articles,  and  endanger  if  not  destroy  the  sys- 


CLAY   ON    THE    AMERICAN    SYSTEM.  83 

tern.  Let  us  then  adopt  the  measure  before  us,  which  will 
benefit  all  classes;  the  farmer,  the  professional  man,  the 
merchant,  the  manufacturer,  the  mechanic;  and  the. cotton 
planter  more  than  all.  A  few  months  ago  there  was  no 
diversity  of  opinion  as  to  the  expediency  of  this  measure. 
All,  then,  seemed  to  unite  in  the  selection  of  these  objects 
for  a  repeal  of  duties  which  were  not  produced  within  the 
country.  Such  a  repeal  did  not  touch  our  domestic  industry, 
violated  no  principle,  offended  no  prejudice. 

Can  we  not  all,  whatever  may  be  our  favorite  theories, 
cordially  unite  on  this  neutral  ground?  "When  that  is  occu- 
pied, let  us  look  beyond  it,  and  see  if  anything  can  be  done 
in  the  field  of  protection,  to  modify  or  improve  it,  or  to 
satisfy  those  who  are  opposed  to  the  system.  Our  southern 
brethren  believe  that  it  is  injurious  to  them,  and  ask  its 
repeal.  We  believe  that  its  abandonment  will  be  prejudicial 
to  them,  and  ruinous  to  every  other  section  of  the  Union. 
However  strong  their  convictions  may  be,  they  are  not 
stronger  than  ours.  .  Between  the  points  of  the  preservation 
of  the  system  and  its  absolute  repeal,  there  is  no  principle 
of  union.  If  it  can  be  shown  to  operate  immoderately  on 
any  quarter — if  the  measure  of  protection  to  any  article  can 
be  demonstrated  to  be  undue  and  inordinate,  it  would  be  the 
duty  of  Congress  to  interpose  and  apply  a  remedy.  And 
none  will  co-operate  more  heartily  than  I  shall  in  the  per- 
formance  of  that  duty.  It  is  quite  probable  that  beneficial 
modifications  of  the  system  may  be  made  without  impairing 
its  efficacy.  But  to  make  it  fulfill  the  purposes  of  its  institu- 
tion, the  measure  of  protection  ought  to  be  adequate.  If  it 
be  not,  all  interests  will  be  injuriously  affected.  The  manu- 
facturer, crippled  in  his  exertions,  will  produce  less  perfect 
and  dearer  fabrics,  and  the  consumer  will  feel  the  conse- 
quence. This  is  the  spirit,  and  these  are  the  principles 
only,  on  which,  it  seems  to  me,  that  a  settlement  of  the 
great  question  can  be  made,  satisfactorily  to  all  parts  of  our 
Union. 


CHAPTER  V. 

PROTECTION  AND  FREE  TRADE. 
BY  JOHN  STUART  MILL. 


OF  INTERFERENCES  OF  GOVERNMENT  GROUNDED  ON  ERRONEOUS 
THEORIES. 

"TjlROM  the  necessary  functions  of  government,  and  the 
JD  effects  produced  on  the  economical  interests  of  society 
by  their  good  or  ill  discharge,  we  proceed  to  the  functions 
which  belong  to  what  I  have  termed,  for  want  of  a  better 
designation,  the  optional  class;  those  which  are  sometimes 
assumed  by  governments  and  sometimes  not,  and  which  it  is 
not  unanimously  admitted  they  ought  to  exercise. 

Before  entering  on  the  general  principles  of  the  question, 
it  will  be  advisable  to  clear  from  our  path  all  those  cases,  in 
which  government  interference  works  ill,  because  grounded 
on  false  views  of  the  subject  interfered  with.  Such  cases 
have  no  connection  with  any  theory  respecting  the  proper 
limits  of  interference.  There  are  some  things  with  which 
governments  ought  not  to  meddle,  and  other  things  with 
which  they  ought;  but  whether  right  or  wrong  in  itself,  the 
interference  must  work  for  ill,  if  government,  not  under- 
standing the  subject  which  it  meddles  with,  meddles  to  bring 
about  a  result  which  would  be  mischievous.  We  will  there- 
fore begin  by  passing  in  review  various  false  theories,  which 
have  from  time  to  time  formed  the  ground  of  acts  of  gov- 
ernment more  or  less  economically  injurious. 

Former  writers  on  Political  Economy  have  found  it  need- 

(84) 


PROTECTIONISM.  85 


ful  to  devote  much,  trouble  and  space  to  this  department  of 
their  subject.  It  has  now  happily  become  possible,  at  least 
in  our  own  country,  greatly  to  abridge  this  purely  negative 
part  of  our  discussions.  The  false  theories  of  Political 
Economy  which  have  done  so  much  mischief  in  times  past, 
are  entirely  discredited  among  all  who  have  not  lagged 
behind  the  general  progress  of  opinion;  and  few  of  the 
enactments  which  were  once  grounded  on  those  theories, 
still  help  to  deform  the  statute  book.  As  the  principles  on 
which  their  condemnation  rests,  have  been  fully  set  forth  in 
other  parts  of  this  treatise,  we  may  here  content  ourselves 
with  a  few  brief  indications. 

OF    THESE    FALSE    THEORIES,    THE     MOST    NOTABLE    IS    THE     DOC- 
TRINE   OF    PROTECTION    TO    NATIVE    INDUSTRY. 

A  phrase  meaning  the  prohibition,  or  the  discouragement 
by  heavy  duties,  of  such  foreign  commodities  as  are  capable 
of  being  produced  at  home.  If  the  theory  involved  in  this 
system  had  been  correct,  the  practical  conclusions  grounded 
on  it  would  not  have  been  unreasonable.  The  theory  was, 
that  to  buy  things  produced  at  home  was  a  national  benefit, 
and  the  introduction  of  foreign  commodities,  generally  a 
national  loss.  It  being  at  the  same  time  evident  that  the 
interest  of  the  consumer  is  to  buy  foreign  commodities  in 
preference  to  domestic  whenever  they  are  either  cheaper  or 
better,  the  interest  of  the  consumer  appeared  in  this  respect 
to  be  contrary  to  the  public  interest;  he  was  certain,  if  left 
to  his'  own  inclinations,  to  do  what  according  to  the  theory 
was  injurious  to  the  public. 

It  was  shown,  however,  in  our  analysis  of  the  effects  of 
international  trade,  as  it  had  been  often  shown  by  former 
writers,  that  the  importation  of  foreign  commodities  in  the 
common  course  of  traffic,  never  takes  place,  except  when  it 
is,  economically  speaking,  a  national  good,  by  causing  the,. 
same  amount  of  commodities  to  be  obtained  at  a  smaller 


86  PROTECTIONISM. 


cost  of  labor  and  capital  to  the  country.  To  prohibit,  there- 
fore, this  importation,  or  impose  duties  which  prevent  it,  is 
to  render  the  labor  and  capital  of  the  country  less  efficient 
in  production  than  they  would  otherwise  be;  and  compel  a 
waste,  of  the  difference  between  the  labor  and  capital  nec- 
essary for  the  home  production  of  the  commodity,  and  that 
which  is  required  for  producing  the  things  with  which  it  can 
be  purchased  from  abroad.  The  amount  of  national  loss 
thus  occasioned  is  measured  by  the  excess  of  the  price  at 
which  the  commodity  is  produced,  over  that  at  which  it 
could  be  imported.  In  the  case  of  manufactured  goods,  the 
whole  difference  between  the  two  prices  is  absorbed  in 
indemnifying  the  producers  for  waste  of  labor,  or  of  the 
capital  which  supports  that  labor.  Those  who  are  supposed 
to  be  benefited,  namely,  the  makers  of  the  protected  articles 
(unless  they  form  an  exclusive  company,  and  have  a  monop- 
oly against  their  own  countrymen  as  well  as  against  foreign- 
ers)-, do  not  obtain  higher  profits  than  other  people.  All  is 
sheer  loss  to  the  country  as  well  as  to  the  consumer.  When 
the  protected  article  is  a  product  of  agriculture  —  the  waste 
of  labor  not  being  incurred  on  the  whole  produce, -but  only 
on  what  may  be  called  the  last  installment  of  it  —  the  extra 
price  is  only  in  part  an  indemnity  for  waste,  the  remainder 
being  a  tax  paid  to  the  landlords. 

The  restrictive  and  prohibitory  policy  was  originally 
grounded  on  what  is  called  the  mercantile  system,  which, 
representing  the  advantages  of  foreign  trade  to  consist 
solely  in  bringing  money  into  the  country,  gave  artificial 
encouragement  to  exportation  of  goods,  and  discountenanced 
their  importation.  The  only  exceptions  to  the  system  were 
those  required  by  the  system  itself.  The  materials  and 
instruments  of  production  were  the  subjects  of  a  contrary 
policy,  directed  however  to  the  same  end;  they  were  freely 
imported,  and  not  permitted  to  be  exported,  in  order  that 
manufacturers,  being  more  cheaply  supplied  with  the  requi- 


PROTECTIONISM.  87 


sites  of  manufacture,  might  be  able  to  sell  cheaper,  and, 
therefore,  to  export  more  largely.  For  a  similar  reason, 
importation  was  allowed  and  even  favored,  when  confined 
to  the  productions  of  countries  which  were  supposed  to  take 
from  the  country  still  more  than  it  took  from  them,  thus 
enriching  it  by  a  favorable  balance  of  trade.  As  part  of 
the  same  system,  colonies  were  founded,  for  the  supposed 
advantage  of  compelling  them  to  buy  our  commodities,  or 
at  all  events  not  to  buy  those  of  any  other  country;  in 
return  for  which  restrictions,  we  were  generally  willing  to 
come  under  an  equivalent  obligation  with  respect  to  the 
staple  productions  of  the  colonists.  The  consequences  of 
the  theory  were  pushed  so  far,  that  it  was  not  unusual  even 
to  give  bounties  on  exportation,  and  induce  foreign er.3  to 
buy  from  us  rather  than  from  other  countries,  by  a  cheap- 
ness which  we  artificially  produced,  by  paying  part  of  the 
price  for  them  out  of  our  own  taxes.  This  is  a  stretch 
beyond  the  point  yet  reached  by  any  private  tradesman 
in  his  competition  for  business.  No  shop-keeper,  I  should 
think,  ever  made  a  practice  of  bribing  customers  by  selling 
goods  to  them  at  a  permanent  loss,  making  it  up  to  him- 
self from  other  funds  in  his  possession. 

The  principle  of  the  mercantile  theory  is  now  given  up 
even  by  writers  and  governments  who  still  cling  to  the  re- 
strictive system.  Whatever  hold  that  system  has  over  men's 
minds,  independently  of  the  private  interests  exposed  to 
real  or  apprehended  loss  by  its  abandonment,  is  derived 
from  fallacies  other  than  the  old  notion  of  the  benefits  of 
heaping  up  money  in  the  country.  The  most  effective  of 
these  is  the  specious  plea  of  employing  our  own  countrymen 
and  our  national  industry,  instead  of  feeding  and  supporting 
the  industry  of  foreigners.  The  answer  to  this  is  evident. 
Without  reverting  to  the  fundamental  theorem  respecting 
the  nature  and  sources  of  employment  for  labor,  it  is  suf- 
ficient to  say,  what  has  usually  been  said  by  the  advocates 


88  PROTECTIONISM. 


of  free  trade,  that  the  alternative  is  not  between  employing 
our  own  people  and  foreigners,  but  between  employing  one 
class  and  other  of  our  own  people.  The  imported  com- 
modity is  always  paid  for,  directly  or  indirectly,  with  the 
produce  of  our  own  industry;  that  industry  being,  at  the 
same  time,  rendered  more  productive,  since,  with  the  same 
labor  and  outlay,  we  are  enabled  to  possess  ourselves  of  a 
greater  quantity  of  the  article.  Those  who  have  not  well 
considered  the  subject  are  not  apt  to  suppose  that  our  export- 
ing an  equivalent  in  our  own  produce,  for  the  foreign  articles 
we  consume,  depends  on  contingencies  —  on  the  consent  of 
foreign  countries  to  make  some  corresponding  relaxation  of 
their  own  restrictions,  or  on  the  question  whether  those 
from  whom  we  buy  are  induced  by  that  circumstance  to  buy 
more  from  us;  and  that,  if  these  things,  or  things  equivalent 
to  them,  do  not  happen,  the  payment  must  be  made  in 
money.  Now,  in  the  first  place,  there  is  nothing  more  objec- 
tionable in  a  money  payment  than  in  payment  by  any  other 
medium,  if  the  state  of  the  market  makes  it  the  most 
advantageous  remittance;  and  the  money  itself  was  first 
acquired,  and  would  again  be  replenished,  by  the  export  of 
an  equivalent  value  of  our  own  products.  But,  in  the  next 
place,  a  very  short  interval  of  paying  in  money  would  so 
lower  prices  as  either  to  stop  a  part  of  the  importation,  or 
raise  up  a  foreign  demand  for  our  produce,  sufficient  to  pay 
for  the  imports.  I  grant  that  this  disturbance  of  the  equa- 
tion of  international  demand  would  be  in  some  degree  to 
our  disadvantage  in  the  purchase  of  other  imported  articles; 
and  that  a  country  which  prohibits  some  foreign  commodi- 
ties, does,  cceteris  paribus,  obtain  those  which  it  does  not 
prohibit,  at  a  less  price  than  it  would  otherwise  have  to  pay. 
To  express  the  same  thing  in  other  words:  a  country  which 
destroys  or  prevents  altogether  certain  branches  of  foreign 
trade,  thereby  annihilating  a  general  gain  to  the  world, 
which  would  be  shared  in  some  proportion  between  itself  and 


PROTECTIONISM.  89 


other  countries,  does,  in  some  circumstances,  draw  to  itself, 
at  the  expense  of  foreigners,  a  larger  share  than  would  else 
belong  to  it  of  the  gain  arising  from  that  portion  of  its 
foreign  trade  which  it  suffers  to  subsist.  But  even  this  it 
can  only  be  enabled  to  do,  if  foreigners  do  not  maintain 
equivalent  prohibitions  or  restrictions  against  its  commodi- 
ties. In  any  case,  the  justice  or  expediency  of  destroying 
one  of  two  gains,  in  order  to  engross  a  rather  larger  share 
of  the  other,  does  not  require  much  discussion;  the  gain, 
too,  which  is  destroyed,  being,  in  proportion  to  the  magni- 
tude of  the  transactions,  the  larger  of  the  two,  since  it  is  the 
one  which  capital,  left  to  itself,  is  supposed  to  seek  by 
preference. 

Defeated  as  a  general  theory,  the  protectionist  doctrine 
finds  support  in  some  particular  cases,  from  considerations 
which,  when  really  in  point,  involve  greater  interests  than 
mere  saving  of  labor;  the  interests  of  national  subsistence 
and  of  national  defense.  The  discussions  on  the  corn  laws 
have  familiarized  everybody  with  the  plea,  that  we  ought  to 
be  independent  of  foreigners  for  the  food  of  the  people; 
and  the  navigation  laws  were  grounded,  in  theory  and  pro- 
fession, on  the  necessity  of  keeping  up  a  "  nursery  of  sea- 
men "  for  the  navy.  On  this  last  subject  I  at  once  admit, 
that  the  object  is  worth  the  sacrifice;  and  that  a  country 
exposed  to  invasion  by  sea,  if  it  cannot  otherwise  have  suf- 
ficient ships  and  sailors  of  its  own,  to  secure  the  means  of 
manning  on  an  emergency  an  adequate  fleet,  is  quite  right  in 
obtaining  those  means,  even  at  an  economical  sacrifice  in 
point  of  cheapness  of  transport.  When  the  English  navi- 
gation laws  were  enacted,  the  Dutch,  from  their  maritime 
skill  and  their  low  rate  of  profit  at  home,  were  able  to  carry 
for  other  nations,  England  included,  at  cheaper  rates  than 
those  nations  could  carry  for  themselves;  which  placed  all 
other  countries  at  a  great  comparative  disadvantage  in  ob- 
taining experienced  seamen  for  their  ships  of  war.  The 


90  PROTECTIONISM. 


navigation  laws,  by  which  this  deficiency  was  remedied,  and 
at  the  same  time  a  blow  struck  against  the  maritime  power 
of  a  nation  with  which  England  was  then  frequently  en- 
gaged in  hostilities,  were  probably,  though  economically 
disadvantageous,  politically  expedient.  But  English  ships 
and  sailors  can  now  navigate  as  cheaply  as  those  of  any 
other  country;  maintaining  at  least  an  equal  competition 
with  the  other  maritime  nations  even  in  their  own  trade. 
The  ends  which  may  once  have  justified  navigation  laws, 
require  them  no  longer,  and  afforded  no  reason  for  main- 
taining this  invidious  exception  to  the  general  rule  of  free 
trade. 

"With  regard  to  subsistence,  the  plea  of  the  protectionists 
has  been  so  often  and  so  triumphantly  met,  that  it  requires 
little  notice  here.  That  country  is  the  most  steadily,  as  well 
as  the  most  abundantly,  supplied  with  food,  which  draws  its 
supplies  from  the  largest  surface.  It  is  ridiculous  to  found 
a  general  system  of  policy  on  so  improbable  a  danger  as 
that  of  being  at  war  with  all  the  nations  of  the  world  at 
once;  or  to  suppose  that,  even  if  inferior  at  sea,  a  whole 
country  could  be  blockaded  like  a  town,  or  that  the  growers 
of  food  in  other  countries  would  not  be  as  anxious  not  to 
lose  an  advantageous  market,  as  we  should  be  not  to  be  de- 
prived of  their  corn.  On  the  subject,  however,  of  subsis- 
tence, there  is  one  point  which  deserves  more  especial  con- 
sideration. In  cases  of  actual  or  apprehended  scarcity, 
many  countries  of  Europe  are  accustomed  to  stop  the  expor- 
tation of  food.  Is  this,  or  not,  sound  policy?  There  can  be 
no  doubt  that  in  the  present  state  of  international  morality, 
a  people  cannot,  any  more  than  an  individual,  be  blamed 
for  not  starving  itself  to  feed  others.  But  if  the  greatest 
amount  of  good  to  mankind  on  the  whole,  were  the  end 
aimed  at  in  the  maxims  of  international  conduct,  such  col- 
lective churlishness  would  certainly  be  condemned  by  them. 
Suppose  that  in  ordinary  circumstances  the  trade  in  food 


PROTECTIONISM.  91 


were  perfectly  free,  so  that  the  price  in  one  country  could 
not  habitually  exceed  that  in  any  other  by  more  than  the 
cost  of  carriage,  together  with  a  moderate  profit  to  the  im- 
porter. A  general  scarcity  ensues,  affecting  all  countries, 
but  in  unequal  degrees.  If  the  price  rose  in  one  country 
more  than  in  others,  it  would  be  a  proof  that  in  that  country 
the  scarcity  was  severest,  and  that  by  permitting  food  to  go 
freely  thither  from  any  other  country,  it  would  be  spared 
from,  a  less  urgent  necessity  to  relieve  a  greater.  When  the 
interests,  therefore,  of  all  countries  are  considered,  free  ex- 
portation is  desirable.  To  the  exporting  country  considered 
separately,  it  may,  at  least  on  the  particular  occasion,  be  an 
inconvenience;  but  taking  into  account  that  the  country 
which  is  now  the  giver,  will  in  some  future  season  be  the 
receiver,  and  the  one  that  is  benefited  by  the  freedom,  I  can- 
not but  think  that  even  to  the  apprehension  of  food-rioters 
it  might  be  made  apparent,  that  in  such  cases  they  should 
do  to  others  what  they  would  wish  done  to  themselves. 

In  countries  in  which  the  system  of  protection  is  declin- 
ing, but  not  yet  wholly  given  up,  such  as  the  United  States, 
a  doctrine  has  come  into  notice  which  is  a  sort  of  compro- 
mise between  free  trade  and  restriction,  namely,  that  pro- 
tection for  protection's  sake  is  improper,  but  that  there  is 
nothing  objectionable  in  having  as  much  protection  as  may 
incidentally  result  from  a  tariff  framed  solely  for  revenue. 
Even  in  England,  regret  is  sometimes  expressed  that  a 
"moderate  fixed  duty"  was  not  preserved  on  corn,  on 
account  of  the  revenue  it  would  yield.  Independently,  how- 
ever, of  the  general  impolicy  of  taxes  on  the  necessaries  of 
life,  this  doctrine  overlooks  the  fact,  that  revenue  is  received 
only  on  the  quantity  imported,  but  that  the  tax  is  paid  on 
the  entire  quantity  consumed.  To  make  the  public  pay 
much  that  the  treasury  may  receive  a  little,  is  not  an  eligible 
mode  of  obtaining  a  revenue.  In  the  case  of  manufactured 
articles  the  doctrine  involves  a  palpable  inconsistency.  The 


92  PROTECTIONISM. 


object  of  the  duty  as  a  means  of  revenue,  is  inconsistent 
with  its  affording,  even  incidentally,  any  protection.  It  can 
only  operate  as  protection  in  so  far  as  it  prevents  importa- 
tion; and  to  whatever  degree  it  prevents  importation,  it 
affords  no  revenue. 

THE    ONLY    CASE    IN   WHICH,  ON    MERE    PRINCIPLES    OF    POLITICAL 
ECONOMY,    PROTECTING    DUTIES    CAN   BE    DEFENSIBLE, 

Is  when  they  are  imposed  temporarily  (especially  in  a 
young  and  rising  nation)  in  hopes  of  naturalizing  a  foreign 
industry,  in  itself  perfectly  suitable  to  the  circumstances  of 
the  country.  The  superiority  of  one  country  over  another 
in  a  branch  of  production,  often  arises  only  from  having 
begun  it  sooner.  There  may  be  no  inherent  advantage  on 
one  part,  or  disadvantage  on  the  other,  but  only  a  present 
superiority  of  acquired  skill  and  experience.  A  country 
which  has  this  skill  and  experience  yet  to  acquire,  may  in 
other  respects  be  better  adapted  to  the  production  than  those 
which  were  earlier  in  the  field;  and  besides,  it  is  a  just  re- 
mark  of  Mr.  Rae,  that  nothing  has  a  greater  tendency  to 
promote  improvements  in  any  branch  of  production,  than  its 
trial  under  a  new  set  of  conditions.  But  it  cannot  be  ex- 
pected that  individuals  should,  at  their  own  risk,  or  rather 
to  their  certain  loss,  introduce  a  new  manufacture,  and  bear 
the  burthen  of  carrying  it  on  until  the  producers  have  been 
educated  up  to  the  level  of  those  with  whom  the  processes 
are  traditional.  A  protecting  duty,  continued  for  a  reasona- 
ble  time,  will  sometimes  be  the  least  inconvenient  mode  in 
which  the  nation  can  tax  itself  for  the  support  of  such  an 
experiment.  But  the  protection  should  be  confined  to  cases 
in  which  there  is  good  ground  of  assurance  that  the  industry 
which  it  fosters  will  after  a  time  be  able  to  dispense  with  it; 
nor  should  the  domestic  producers  ever  be  allowed  to  expect 
that  it  will  be  continued  to  them  beyond  the  time  necessary 
for  a  fair  trial  of  what  they  are  capable  of  accomplishing. 


PROTECTIONISM.  93 


The  only  writer  of  any  reputation  as  a  political  economist, 
who  now  adheres  to  the  protectionist  doctrine,  Mr.  H.  C. 
Carey,  rests  its  defense,  in  an  economic  point  of  view,  prin- 
cipally on  two  reasons.  One  is,  the  great  saving  in  cost  of 
carriage,  consequent  on  producing  commodities  at  or  very 
near  to  the  place  where  they  are  to  be  consumed.  The 
whole  of  the  cost  of  carriage,  both  on  the  commodities  im- 
ported and  on  those  exported  in  exchange  for  them,  he 
regards  as  a  direct  burthen  on  the  producers,  and  not,  as  is 
obviously  the  truth,  on  the  consumers.  On  whomsoever  it 
falls,  it  is,  without  doubt,  a  burthen  on  the  industry  of  the 
world.  But  it  is  obvious  (and  that  Mr.  Carey  does  not  see 
it,  is  one  of  the  many  surprising  things  in  his  book)  that  the 
burthen  is  only  borne  for  a  more  than  equivalent  advantage. 
If  the  commodity  is  bought  in  a  foreign  country  with 
domestic  produce  in  spite  of  the  double  cost  of  carriage,  the 
fact  proves  that,  heavy  as  that  cost  may  be,  the  saving  in 
cost  of  production  outweighs  it,  and  the  collective  labor  of 
the  country  is  on  the  whole  better  remunerated  than  if  the 
article  were  produced  at  home.  Cost  of  carriage  is  a  natural 
protecting  duty,  which  free  trade  has  no  power  to  abrogate; 
and  unless  America  gained  more  by  obtaining  her  manufac- 
tures through  the  medium  of  her  corn  and  cotton,  than  she 
loses  in  cost  of  carriage,  the  capital  employed  in  producing 
corn  and  cotton  in  annually  increased  quantities  for  the  for- 
eign  market,  would  turn  to  manufactures  instead.  The  nat- 
ural advantage  attending  a  mode  of  industry  in  which  there 
is  less  cost  of  carriage  to  pay,  can  at  most  be  only  a  justifica- 
tion for  a  temporary  and  merely  tentative  protection.  The 
expenses  of  production  being  always  greatest  at  first,  it  may 
happen  that  the  home  production,  though  really  the  most 
advantageous,  may  not  become  so  until  after  a  certain  dura- 
tion of  pecuniary  loss,  which  it  is  not  to  be  expected  that  pri- 
vate speculators  should  incur  in  order  that  their  successors 
may  be  benefited  by  their  ruin.  I  have  therefore  conceded 


96  PROTECTIONISM. 


tion,  Mr.  Wakefield  has  pointed  out  a  better  way:  to  modify 
the  existing  method  of  disposing  of  the  unoccupied  lands,  by 
raising  their  price,  instead  of  lowering  it,  or  giving  away  the 
land  gratuitously,  as  is  largely  done  since  the  passing  of  the 
Homestead  Act.  To  cut  the  knot  in  Mr.  Carey's  fashion,  by 
protectionism,  it  would  be  necessary  that  Ohio  and  Michigan 
should  be  protected  against  Massachusetts  as  well  as  against 
England;  for  the  manufactories  of  New  England,  no  more 
than  those  of  the  old  country,  accomplish  his  desideratum  of 
bringing  a  manufacturing  population  to  the  doors  of  the 
Western  farmer.  Boston  and  New  York  do  not  supply  the 
want  of  local  towns  to  the  "Western  prairies,  any  better  than 
Manchester;  and  it  is  as  difficult  to  get  back  the  manure 
from  the  one  place  as  from  the  other. 

There  is  only  one  part  of  the  protectionist  scheme  which 
requires  any  further  notice:  its  policy  towards  colonies,  and 
foreign  dependencies;  that  of  compelling  them  to  trade  exclu- 
sively with  the  dominant  country.  A  country  which  thus 
secures  to  itself  an  extra  foreign  demand  for  its  commodities, 
undoubtedly  gives  itself  some  advantage  in  the  distribution 
of  the  general  gains  of  the  commercial  world.  Since,  however, 
it  causes  the  industry  and  capital  of  the  colony  to  be  diverted 
from  channels  which  are  proved  to  be  the  most  productive, 
inasmuch  as  they  are  those  into  which  industry  and  capital 
spontaneously  tend  to  flow;  there  is  a  loss,  on  the  whole,  to 
the  productive  powers  of  the  world,  and  the  mother  country 
does  not  gain  so  much  as  she  makes  the  colony  lose.  If, 
therefore,  the  mother  country  refuses  to  acknowledge  any 
reciprocity  of  obligation,  she  imposes  a  tribute  on  the  colony 
in  an  indirect  mode,  greatly  more  oppressive  and  injurious 
than  the  direct.  But  if,  with  a  more  equitable  spirit,  she 
submits  herself  to  corresponding  restrictions  for  the  benefit 
of  the  colony,  the  result  of  the  whole  transaction  is  the  ridic- 
ulous one,  that  each  party  loses  much,  in  order  that  the  other 
may  gain  a  little. 


PROTECTIONISM.  97 


MONOPOLIES COMBINATION    LAWS. 

Governments,  however,  are  oftener  chargeable  with  having 
attempted,  too  successfully,  to  make  things  dear,  than  with 
having  aimed  by  wrong  means  at  making  them  cheap.  The 
usual  instrument  for  producing  artificial  dearness  is  monop- 
oly. To  confer  a  monopoly  upon  a  producer  or  dealer,  or 
upon  a  set  of  producers  or  dealers  not  too  numerous  to 
combine,  is  to  give  them  the  power  of  levying  any  amount 
of  taxation  on  the  public,  for  their  individual  benefit,  which 
will  not  make  the  public  forego  the  use  of  the  commodity. 
When  the  shares  in  the  monopoly  are  so  numerous  and  so 
widely  scattered  that  they  are  prevented  from  combining, 
the  evil  is  considerably  less:  but  even  then  the  competition 
is  not  so  active  among  a  limited,  as  among  an  unlimited 
number.  Those  who  feel  assured  of  a  fair  average  propor- 
tion in  the  general  business,  are  seldom  eager  to  get  a  larger 
share,  by  foregoing  a  portion  of  their  profits.  A  limitation 
of  competition,  however  partial,  may  have  mischievous 
effects  quite  disproportioned  to  the  apparent  cause.  The 
mere  exclusion  of  foreigners,  from  a  branch  of  industry  open 
to  the  free  competition  of  every  native,  has  been  known, 
even  in  England,  to  render  that  branch  a  conspicuous  excep- 
tion to  the  general  industrial  energy  of  the  country.  The 
silk  manufacture  of  England  remained  far  behind  that  of 
other  countries  of  Europe,  so  long  as  the  foreign  fabrics 
were  prohibited.  In  addition  to  the  tax  levied  for  the  profit, 
real  or  imaginary,  of  the  monopolists,  the  consumer  thus 
pays  an  additional  tax  for  their  laziness  and  incapacity. 
When  relieved  from  the  immediate  stimulus  of  competition, 
producers  and  dealers  grow  indifferent  to  the  dictates  of, 
their  ultimate  pecuniary  interest;  preferring  to  the  most 
hopeful  prospects,  the  present  ease  of  adhering  to  routine. 
A  person  who  is  already  thriving,  seldom  puts  himself  out 
of  his  way  to  commence  even  a  lucrative  improvement, 


94  PROTECTIONISM. 


that  in  a  new  country,  a  temporary  protecting  duty  may 
sometimes  be  economically  defensible;  on  condition,  how- 
ever,  that  it  be  strictly  limited  in  point  of  time,  and  provision 
be  made  that  during  the  latter  part  of  its  existence  it  be  on 
a  gradually  decreasing  scale.  Such  temporary  protection  is 
of  the  same  nature  as  a  patent,  and  should  be  governed  by 
similar  conditions. 

The  remaining  argument  of  Mr.  Carey  in  support  of  the 
economic  benefits  of  protectionism,  applies  only  to  countries 
whose  exports  consist  of  agricultural  produce.  He  argues, 
that  by  a  trade  of  this  description  they  actually  send  away 
their  soil;  the  distant  consumers  not  giving  back  to  the  land 
of  the  country,  as  home  consumers  would  do,  the  fertilizing 
elements  which  they  abstract  from  it.  This  argument  de- 
serves attention,  on  account  of  the  physical  truth  on  which  it 
is  founded;  a  truth  which  has  only  lately  come  to  be  under- 
stood, but  which  is  henceforth  destined  to  be  a  permanent 
element  in  the  thoughts  of  statesmen,  as  it  must  always  have 
been  in  the  destinies  of  nations.  To  the  question  of  protection- 
ism, however,  it  is  irrelevant.  That  the  immense  growth  of 
raw  produce  in  America  to  be  consumed  in  Europe,  is  pro- 
gressively exhausting  the  soil  of  the  Eastern,  and  even  of 
the  older  Western  States,  and  that  both  are  already  far  less 
productive  than  formerly,  is  credible  in  itself,  even  if  no  one 
bore  witness  to  it.  But  what  I  have  already  said  respecting 
cost  of  carriage,  is  true  also  of  the  cost  of  manuring.  Free 
trade  does  not  compel  America  to  export  corn;  she  would 
cease  to  do  so,  if  it  ceased  to  be  to  her  advantage.  As,  then, 
she  would  not  persist  in  exporting  raw  produce  and  import- 
ing manufactures  any  longer  than  the  labor  she  saved  by 
doing  so  exceeded  what  the  carriage  cost  her;  so,  when  it 
becomes  necessary  for  her  to  replace  in  the  soil  the  elements 
of  fertility  which  she  had  sent  away,  if  the  saving  in  cost  of 
production  were  more  than  equivalent  to  the  cost  of  carriage 
and  of  manure  together,  manure  would  be  imported,  and  if 


PROTECTIONISM.  95 


not,  the  export  of  corn  would  cease.  It  is  evident  that  one 
of  these  two  things  would  already  have  taken  place,  if  there 
had  not  been  at  hand  a  constant  succession  of  new  soils,  not 
yet  exhausted  of  their  fertility,  the  cultivation  of  which  ena- 
bles her,  whether  judiciously  or  not,  to  postpone  the  question 
of  manure.  As  soon  as  it  no  longer  answers  better  to  break 
up  new  soils  than  to  manure  the  old,  America  will  either 
become  a  regular  importer  of  manure,  or  will  without  pro- 
tecting duties  grow  corn  for  herself  only,  and  manufacturing 
for  herself,  will  make  her  manure,  as  Mr.  Carey  desires,  at 
home. 

For  these  obvious  reasons,  I  hold  Mr.  Carey's  economic 
arguments  for  protectionism  to  be  totally  invalid.  The  econ- 
omic, however,  is  far  from  being  the  strongest  point  of  his 
case.  American  protectionists  often  reason  extremely  ill,  but 
it  is  an  injustice  to  them  to  suppose  that  their  protectionist 
creed  rests  upon  nothing  superior  to  an  economic  blunder: 
many  of  them  have  been  led  to  it  much  more  by  considera- 
tion for  the  higher  interests  of  humanity,  than  by  purely 
economic  reasons.  They,  and  Mr.  Carey  at  their  head,  deem 
it  a  necessary  condition  of  human  improvement  that  towns 
should  abound;  that  men  should  combine  their  labor,  by 
means  of  interchange,  with  near  neighbors — with  people  of 
pursuits,  capacities,  and  mental  cultivation  different  from 
their  own,  sufficiently  close  at  hand  for  mutual  sharpening  of 
wits  and  enlarging  of  ideas — rather  than  with  people  on  the 
opposite  side  of  the  globe.  They  believe  that  a  nation  all 
engaged  in  the  same,  or  nearly  the  same,  pursuit — a  nation 
all  agricultural — cannot  attain  a  high  state  of  civilization  and 
culture.  And  for  this  there  is  a  great  foundation  of  reason. 
If  the  difficulty  can  be  overcome,  the  United  States,  with 
their  free  institutions,  their  universal  schooling,  and  their 
omnipresent  press,  are  the  people  to  do  it;  but  whether  this 
is  possible  or  not,  is  still  a  problem.  So  far,  however,  as  it 
is  an  object  to  check  the  excessive  dispersion  of  the  popula- 


98  PROTECTIONISM. 


unless  urged  by  the  additional  motive  of  fear  lest  some  rival 
should  supplant  him  by  getting  possession  of  it  before  him. 
The  condemnation  of  monopolies  ought  not  to  extend  to 
patents,  by  which  the  originator  of  an  improved  process  is 
allowed  to  enjoy,  for  a  limited  period,  the  exclusive  privilege 
of  using  his  own  improvement.  This  is  not  making  the 
commodity  dear  for  his  benefit,  but  merely  postponing  a  part 
of  the  increased  cheapness  which  the  public  owe  to  the 
inventor,  in  order  to  compensate  and  reward  him  for  the 
service.  That  he  ought  to  be  both  compensated  and  rewarded 
for  it,  will  not  be  denied,  and  also  that  if  all  were  at  once 
allowed  to  avail  themselves  of  his  ingenuity,  without  having 
shared  the  labors  or  the  expenses  which  he  had  to  incur  in 
bringing  his  idea  into  a  practical  shape,  either  such  expenses 
and  labors  would  be  undergone  by  nobody,  except  very 
opulent  and  very  public-spirited  persons,  or  the  state  must 
put  a  value  on  the  service  rendered  by  an  inventor,  and 
make  him  a  pecuniary  grant.  This  has  been  done  in  some 
instances,  and  may  be  done  without  inconvenience  in  cases 
of  very  conspicuous  public  benefit;  but  in  general  an  exclu- 
sive privilege,  of  temporary  duration,  is  preferable;  because 
it  leaves  nothing  to  any  one's  discretion:  because  the  reward 
conferred  by  it  depends  upon  the  invention's  being  found 
useful,  and  the  greater  the  usefulness  the  greater  the  reward ; 
and  because  it  is  paid  by  the  very  persons  to  whom  the 
service  is  rendered,  the  consumers  of  the  commodityo  So 
decisive,  indeed,  are  those  considerations,  that  if  the  system 
of  patents  were  abandoned  for  that  of  rewards  by  the  state, 
the  best  shape  which  these  could  assume  would  be  that  of  a 
small  temporary  tax,  imposed  for  the  inventor's  benefit,  on 
all  persons  making  use  of  the  invention.  To  this,  however, 
or  to  any  other  system  which  would  vest  in  the  state  the 
power  of  deciding  whether  an  inventor  should  derive  any 
pecuniary  advantage  from  the  public  benefit  which  he 
confers,  the  objections  are  evidently  stronger  and  more 


PROTECTIONISM.  99 


fundamental  than  the  strongest  which  can  possibly  be  urged 
against  patents.  It  is  generally  admitted  that  the  present 
patent  laws  need  much  improvement;  but  in  this  case,  as 
well  as  in  the  closely  analogous  one  of  copyright,  it  would 
be  a  gross  immorality  in  the  law  to  set  everybody  free  to 
use  a  person's  work  without  his  consent  and  without  giving 
him  an  equivalent.  I  have  seen  with  real  alarm  several 
recent  attempts,  in  quarters  carrying  some  authority,  to 
impugn  the  principle  of  patents  altogether;  attempts  which, 
if  practically  successful,  would  enthrone  free  stealing  under 
the  prostituted  name  of  free  trade,  and  make  the  men  of 
brains,  still  more  than  at  present,  the  needy  retainers  and 
dependents  of  the  men  of  money-bags. 


CHAPTER  VI. 

SPEECH  OF  HORACE  GREELEY  ON  THE  GROUNDS 
OF  PROTECTION.* 


Mr.  President  and  Respected  Auditors:— Ik  has  devolved  on 
me,  as  junior  advocate  for  the  cause  of  protection,  to  open 
the  discussion  of  this  question.  I  do  this  with  less  diffidence 
than  I  should  feel  in  meeting  able  opponents  and  practiced 
disputants  on  almost  any  other  topic,  because  I  am  strongly 
confident  that  you,  my  hearers,  will  regard  this  as  a  subject 
demanding  logic  rather  than  rhetoric;  the  exhibition  and 
proper  treatment  of  homely  truths,  rather  than  the  indulgence 
of  flights  of  fancy.  As  sensible  as  you  can  be  of  my 
deficiencies  as  a  debater,  I  have  chosen  to  put  my  views  on 
paper,  in  order  that  I  may  present  them  in  as  concise  a 
manner  as  possible,  and  not  consume  my  hour  before  com- 
mencing my  argument.  You  have  nothing  of  oratory  to 
lose  by  this  course;  I  will  hope  that  something  may  be 
gained  to  my  cause  in  clearness  and  force.  And  here  let  me 
say  that,  while  the  hours  I  have  been  enabled  to  give  to 
preparation  for  this  debate  have  been  few  indeed,  I  feel  the 
less  regret  in  that  my  life  has  been  in  some  measure  a 
preparation.  If  there  be  any  subject  to  which  I  have 
devoted  time,  and  thought,  and  patient  study,  in  a  spirit  of 

*  Speech  at  the  Tabernacle,  New  York,  February  10, 1843,  in  public  debate  on 
this  resolution  :— 

Resolved,  That  a  Protective  Tariff  is  conducive  to  our  National  Prosperity. 
Affirmative:  JOSEPH  BLUNT,  Negative-  SAMUEL  J.  TILDEN, 

HORACE  GREELEY.  PARKE  GODWIN. 

From  Greeley's  "  Recollections  of  a  Busy  Life." 

(100) 


HORACE  GREELEY  ON  PROTECTION.        101 

anxious  desire  to  learn  and  follow  the  truth,  it  is  this  very 
question  of  protection;  if  1  have  totally  misapprehended  its 
character  and  bearings,  then  am  I  ignorant,  hopelessly 
ignorant  indeed.  And,  while  I  may  not  hope  to  set  before 
you,  in  the  brief  space  allotted  me,  all  that  is  essential  to  a 
full  understanding  of  a  question  which  spans  the  whole  arch 
of  political  economy, — on  which  able  men  have  written 
volumes  without  at  all  exhausting  it, — I  do  entertain  a 
sanguine  hope  that  I  shall  be  able  to  set  before  you  considera- 
tions conclusive  to  the  candid  and  unbiased  mind  of  the 
policy  and  necessity  of  protection.  Let  us  not  waste  our 
time  on  non-essentials.  That  unwise  and  unjust  measures 
have  been  adopted  under  the  pretence  of  protection,  I  stand 
not  here  to  deny;  that  laws  intended  to  be  protective  have 
sometimes  been  injurious  in  their  tendency,  I  need  not 
dispute.  The  logic  which  would  thence  infer  the  futility  or 
the  danger  of  protective  legislation  would  just  as  easily  prove 
all  laws  and  all  policy  mischievous  and  destructive.  Politi- 
cal Economy  is  one  of  the  latest  born  of  the  sciences;  the 
very  fact  that  we  meet  here  this  evening  to  discuss  a  question 
so  fundamental  as  this,  proves  it  to  be  yet  in  its  comparative 
infancy.  The  sole  favor  I  shall  ask  of  my  opponents,  there- 
fore, is  that  they  will  not  waste  their  efforts  and  your  time 
in  attacking  positions  that  we  do  not  maintain,  and  hewing 
down  straw  giants  of  their  own  manufacture,  but  meet 
directly  the  arguments  which  I  shall  advance,  and  which,  for 
the  sake  of  simplicity  and  clearness,  I  will  proceed  to  put 
before  you  in  the  form  of  propositions  and  their  illustrations, 
as  follows: — 

PROPOSITION  I.  A  Nation  which  would  he  prosperous,  must 
prosecute  various  branches  of  industry,  and  supply  its  vital  wants 
mainly  by  the  labor  of  its  own  hands. 

Cast  your  eyes  where  you  will  over  the  face  of  the  earta, 
trace  back  the  history  of  man  and  of  nations  to  the  earliest 
recorded  periods,  and  I  think  you  will  find  this  rule  uniformly 


102        HORACE  GREELEY  ON  PROTECTION. 

prevailing,  that  the  nation  which  is  eminently  agricultural 
and  grain-exporting, — which  depends  mainly  or  principally 
on  other  nations  for  its  regular  supplies  of  manufactured 
fabrics, — has  been  comparatively  a  poor  nation,  and  ulti- 
mately a  dependent  nation.  I  do  not  say  that  this  is  the 
instant  result  of  exchanging  the  rude  staples  of  agriculture 
for  the  more  delicate  fabrics  of  art;  but  I  maintain  that  it 
is  the  inevitable  tendency.  The  agricultural  nation  falls  in 
debt,  becomes  impoverished,  and  ultimately  subject.  The 
palaces  of  " merchant  princes"  may  emblazon  its  harbors 
and  overshadow  its  navigable  waters;  there  maybe  a  mighty 
Alexandria,  but  a  miserable  Egypt  behind  it;  a  nourishing 
Odessa  or  Dantzic,  but  a  rude,  thinly-peopled  southern  Eussia 
or  Poland ;  the  exchangers  may  flourish  and  roll  in  luxury, 
but  the  producers  famish  and  die.  Indeed,  few  old  and 
civilized  countries  become  largely  exporters  of  grain  until 
they  have  lost,  or  by  corruption  are  prepared  to  surrender, 
their  independence;  and  these  often  present  the  spectacle  of 
the  laborer  starving  on  the  fields  he  has  tilled,  in  the  midst 
of  their  fertility  and  promise.  These  appearances  rest  upon 
and  indicate  a  law,  which  I  shall  endeavor  hereafter  to 
explain.  I  pass  now  to  my 

PROPOSITION  II.  There  is  a  natural  tendency  in  a  compara- 
tively new  country  to  become  and  continue  an  exporter  of  grain 
and  other  rude  staples  and  an  importer  of  manufactures. 

I  think  I  hardly  need  waste  time  in  demonstrating  this 
proposition,  since  it  is  illustrated  and  confirmed  by  universal 
experience,  and  rests  on  obvious  laws.  The  new  country 
has  abundant  and  fertile  soil,  and  produces  grain  with 
remarkable  facility;  also,  meats,  timber,  ashes,  and  most  rude 
and  bulky  articles.  Labor  is  there  in  demand,  being- 
required  to  clear,  to  build,  to  open  roads,  etc.,  and  the 
laborers  are  comparatively  few;  while,  in  older  countries, 
labor  is  abundant  and  cheap,  as  also  are  capital,  machinery, 


HORACE  GREELEY  ON  PROTECTION.        103 

and  all  the  means  of  the  cheap  production  of  manufactured 
fabrics.  I  surely  need  not  waste  words  to  show  that,  in  the 
absence  of  any  counteracting  policy,  the  new  country  will 
import,  and  continue  to  import,  largely  of  the  fabrics  of 
older  countries,  and  to  pay  for  them,  so  far  as  she  may,  with 
her  agricultural  staples.  I  will  endeavor  to  show  hereafter 
that  she  will  continue  to  do  this  long  after  she  has  attained 
a  condition  to  manufacture  them  as  cheaply  for  herself,  even 
regarding  the  money  cost  alone.  But  that  does  not  come 
under  the  present  head.  The  whole  history  of  our  country, 
and  especially  from  1782  to  '90,  when  we  had  no  tariff  and 
scarcely  any  paper  money, — proves  that,  whatever  may  be 
the  currency  or  the  internal  condition  of  the  new  country, 
it  will  continue  to  draw  its  chief  supplies  from  the  old, — 
large  or  small  according  to  its  measure  of  ability  to  pay  or 
obtain  credit  for  them;  but  still,  putting  duties  on  imports 
out  of  the  question,  it  will  continue  to  buy  its  manufactures 
abroad,  whether  in  prosperity  or  adversity,  inflation  or 
depression.  I  now  advance  to  my 

PROPOSITION  III.     It  is  injurious  to  the  new  country  thus  to 
j  j 

continue  dependent  for  its  supplies  of  clothing  and  manufactured 
fabrics  on  the  old. 

As  this  is  probably  the  point  on  which  the  doctrines  of 
protection  first  come  directly  in  collision  with  those  of  free 
trade,  I  will  treat  it  more  deliberately,  and  endeavor  to 
illustrate  and  demonstrate  it. 

I  presume  I  need  not  waste  time  in  showing  that  the 
ruling  price  of  grain  (as  any  manufacture)  in  a  region  whence 
it  is  considerably  exported,  will  be  its  price  at  the  point  to 
which  it  is  exported,  less  the  cost  of  such  transportation.  For 
instance:  the  cost  of  transporting  wheat  hither  from  large 
grain-growing  sections  of  Illinois,  was  last  fall  sixty  cents; 
and,  New  York  being  their  most  available  market,  and  the 
price  here  ninety  cents,  the  market  there  at  once  settled  at 


104  HORACE   GREELEY   ON    PROTECTION. 

thirty  cents.  As  this  adjustment  of  prices  rests  on  a  law 
obvious,  immutable  as  gravitation,  I  presume  I  need  not 
waste  words  in  establishing  it. 

I  proceed,  then,  to  my  next  point.  The  average  price  of 
wheat  throughout  the  world  is  something  less  than  one 
dollar  per  bushel;  higher  where  the  consumption  largely 
exceeds  the  adjacent  production,  lower  where  the  production 
largely  exceeds  the  immediate  consumption  (I  put  out  of 
view  in  this  statement  the  inequalities  created  by  tariffs,  as  I 
choose  at  this  point  to  argue  the  question  on  the  basis  of 
universal  free  trade,  which  is  of  course  the  basis  most 
favorable  to  my  opponents).  I  say,  then,  if  all  tariffs  were 
abolished  to-morrow,  the  price  of  wheat  in  England — that 
being  the  most  considerable  ultimate  market  of  surpluses, 
and  the  chief  supplier  of  our  manufactures — would  govern 
the  price  in  this  country,  while  it  would  be  itself  governed 
by  the  price  at  which  that  staple  could  be  procured  in  suffi- 
ciency from  other  grain-growing  regions.  Now,  southern 
Russia  and  central  Poland  produce  wheat  for  exportation  at 
thirty  to  fifty  cents  per  bushel;  but  the  price  is  so  increased 
by  the  cost  of  transportation  that  at  Dantzic  it  averages 
some  ninety  and  at  Odessa  some  eighty  cents  per  bushel. 
The  cost  of  importation  to  England  from  these  ports  being 
ten  and  fifteen  cents  respectively,  the  actual  cost  of  the 
article  in  England,  all  charges  paid,  and  allowing  for  a  small 
increase  of  price  consequent  on  the  increased  demand,  would 
not  in  the  absence  of  all  tariffs  whatever,  exceed  one  dollar 
and  ten  cents  per  bushel;  and  this  would  be  the  average 
price  at  which  we  must  sell  it  in  England  in  order  to  buy 
thence  the  great  bulk  of  our  manufactures.  I  think  no  man 
will  dispute  or  seriously  vary  this  calculation.  Neither  can 
any  reflecting  man  seriously  contend  that  we  could  purchase 
forty  or  fifty  millions'  worth  or  more  of  foreign  manufac- 
tures per  annum,  and  pay  for  them  in  additional  products  of 
our  slave  labor — in  cotton  and  tobacco.  The  consumption 


HORACE  GREELEY  ON  PROTECTION.        105 

of  these  articles  is  now  pressed  to  its  utmost  limit, — that  of 
cotton  especially  is  borne  down  by  the  immense  weight  of 
the  crops  annually  thrown  upon  it,  and  almost  constantly  on 
the  verge  of  a  glut.  If  we  are  to  buy  our  manufactures 
principally  from  Europe,  we  must  pay  for  the  additional 
amount  mainly  in  the  products  of  northern  agricultural 
industry, — that  is  universally  agreed  on.  The  point  to  be 
determined  is,  whether  we  could  obtain  them  abroad  cheaper 
— really  and  positively  cheaper,  all  tariffs  being  abrogated — 
than  under  an  efficient  system  of  protection. 

Let  us  closely  scan  this  question.  Illinois  and  Indiana, 
natural  grain-growing  States,  need  cloths;  and,  in  the 
absence  of  all  tariffs,  these  can  be  transported  to  them  from 
England  for  two  to  three  per  cent,  of  their  value.  It  fol- 
lows, then,  that,  in  order  to  undersell  any  American  compe- 
tition, the  British  manufacturer  need  only  put  his  cloths  at 
his  factory  five  percent,  below  the  wholesale  price  of  such 
cloths  in  Illinois,  in  order  to  command  the  American  market. 
That  is,  allowing  a  fair  broadcloth  to  be  manufactured  in  or 
near  Illinois  for  three  dollars  and  a  quarter  per  yard,  cash 
price,  in  the  face  of  British  rivalry,  and  paying  American 
prices  for  materials  and  labor,  the  British  manufacturer  has 
only  to  make  that  same  cloth  at  three  dollars  per  yard  in 
Leeds  or  Huddersfield,  and  he  can  decidedly  undersell  his 
American  rival,  and  drive  him  out  of  the  market.  Mind,  I 
do  not  say  that  he  would  supply  the  Illinois  market  at  that 
price  after  the  American  rivalry  had  been  crushed;  I  know  he 
would  not ;  but,  so  long  as  .any  serious  effort  to  build  up  or 
sustain  manufactures  in  this  country  existed,  the  large  and 
strong  European  establishments  would  struggle  for  the 
additional  market  which  our  growing  and  plenteous  country 
so  invitingly  proffers.  It  is  well  known  that  in  1815-16, 
after  the  close  of  the  last  war,  British  manufactures  were 
offered  for  sale  in  our  chief  markets  at  the  rate  of  " pound 
for  pound" — that  is,  fabrics  of  which  the  first  cost  to  the 


106        HORACE  GREELEY  ON  PROTECTION* 

manufacturer  was  $4.44  were  offered  in  Boston  market  at 
$3.33,  duty  paid.  This  was  not  sacrifice  —  it  was  dictated 
by  a  profound  forecast.  "Well  did  the  foreign  fabricants 
know  that  their  self-interest  dictated  the  utter  overthrow,  at 
whatever  cost,  of  the  young  rivals  which  the  war  had  built  up 
in  this  country,  and  which  our  government  and  a  majority  of 
the  people  had  blindly  or  indolently  abandoned  to  their  fate. 
William  Cobbett,  the  celebrated  radical,  but  with  a  sturdy 
English  heart,  boasted  upon  his  first  return  to  England  that 
he  had  been  actively  engaged  here  in  promoting  the  interests 
of  his  country  by  compassing  the  destruction  of  American 
manufactories  in  various  ways  which  he  specified  —  "some- 
times (says  he)  ly  fire"  We  all  know  that  great  sacrifices 
are  often  submitted  to  by  a  rich  and  long-established  stage 
owner,  steamboat  proprietor,  or  whatever,  to  break  down  a 
young  and  comparatively  penniless  rival.  So  in  a  thousand 
instances,  especialty  in  a  rivalry  for  so  large  a  prize  as  the 
supplying  with  manufactures  of  a  great  and  growing  nation. 
But  I  here  put  aside  all  calculations  of  a  temporary  sacrifice ; 
I  suppose  merely  that  the  foreign  manufacturers  will  supply 
our  grain-growing  States  with  cloths  at  a  trifling  profit  so 
long  as  they  encounter  American  rivalry;  and  I  say  it  is 
perfectly  obvious  that,  if  it  cost  three  dollars  and  a  quarter 
a  yard  to  make  a  fair  broadcloth  in  or  near  Illinois,  in  the 
infancy  of  our  arts,  and  a  like  .article  could  be  made  in 
Europe  for  three  dollars,  then  the  utter  destruction  of  the 
American  manufacture  is  inevitable.  The  foreign  drives  it 
out  of  the  market  and  its  maker  into  bankruptcy;  and  now 
our  farmers,  in  purchasing  their  cloths,  "  buy  where  they 
can  buy  cheapest,"  which  is  the  first  commandment  of  free 
trade,  and  get  their  cloth  of  England  at  three  dollars  a  yard. 
I  maintain  that  this  would  not  last  a  year  after  the  Ameri- 
can factories  had  been  silenced  — that  then  the  British  oper- 
ator would  begin  to  think  of  profits  as  well  as  bare  cost  for 
his  cloth,  and  to  adjust  his  prices  so  as  to  recover  what  it 


HORACE  GREELEY  ON  PROTECTION.        107 

had  cost  him  to  put  down  the  dangerous  competition.  But 
let  this  pass  for  the  present,  and  say  the  foreign  cloth  is 
sold  to  Illinois  -for  three  dollars  per  yard.  We  have  yet 
to  ascertain  how  much  she  has  gained  or  lost  by  the 
operation. 

This,  says  free  trade,  is. very  plain  and  easy.  The  four 
simple  rules  of  arithmetic  suffice  to  measure  it.  She  has 
bought,  say  a  million  yards  of  foreign  cloth  for  three  dol- 
lars, where  she  formerly  paid  three  and  a  quarter  for  Amer- 
ican; making  a  clear  saving  of  a  quarter  of  a  million 
dollars. 

But  not  so  fast  —  we  have  omitted  one  important  element 
of  the  calculation.  We  have  yet  to  see  what  effect  the  pur- 
chase of  her  cloth  in  Europe,  as  contrasted  with  its  man- 
ufacture  at  home,  will  have  on  the  price  of  her  agri- 
cultural staples.  We  have  seen  already  that,  in  case  she 
is  forced  to  sell  a  portion  of  her  surplus  product  in  Europe, 
the  price  of  that  surplus  must  be  the  price  which  can  be 
procured  for  it  in  England,  less  the  cost  of  carrying  it  there. 
In  other  words:  the  average  price  in  England  being  one 
dollar  and  ten  cents,  and  the  average  cost  of  bringing  it  to 
New  York  being  at  least  fifty  cents,  and  then  of  transport- 
ing it  to  England  at  least  twenty -five  more,  the  net  pro- 
ceeds to  Illinois  cannot  exceed  thirty-five  cents  per  bushel. 
I  need  not  more  than  state  so  obvious  a  truth  as  that  the 
price  at  which  the  surplus  can  be  sold  governs  the  price  of 
the  whole  crop ;  nor,  indeed,  if  it  were  possible  to  deny  this, 
would  it  at  all  affect  the  argument.  The  real  question  to  be 
determined  is,  not  whether  the  American  or  the  British 
manufacturers  will  furnish  the  most  cloth  for  the  least  cash, 
but  which  will  supply  the  requisite  quantity  of  cloth  for  the 
least  grain  in  Illinois.  Now  we  have  seen  already  that  the 
price  of  grain  at  any  point  where  it  is  readily  and  largely 
produced,  is  governed  by  its  nearness  to  or  remoteness  from 
the  market  to  which  its  surplus  tends,  and  the  least  favorable 


108  HORAC1!']    (JIJKKLKV    OX    PROTECTION. 


market  in  which  any  portion  of  it  must  be  sold.  For 
instance:  If  Illinois  produces  a  surplus  of  five  million 
bushels  of  grain,  and  can  sell  one  million  of  bushels  in 
New  York,' and  two  millions  in  New  England,  and  another 
million  in  the  West  Indies,  and  for  the  fifth  million  is  com- 
pelled to  seek  a  market  in  England,  and  that,  being  the 
remotest  point  at  which  she  sells,  and  the  point  most  exposed 
to  disadvantageous  competition,  is  naturally  the  poorest 
market,  that  farthest  and  lowest  market  to  which  she  sends 
her  surplus  will  govern,  to  a  great  extent  if  not  absolutely, 
the  price  she  receives  for  the  whole  surplus.  But,  on  the 
other  hand,  let  her  cloths,  her  wares,  be  manufactured  in 
her  midst  or  on  the  junctions  and  waterfalls  in  her  vicinity, 
thus  affording  an  immediate  market  for  her  grain,  and  now 
the  average  price  of  it  rises,  by  an  irresistible  law,  nearly  or 
quite  to  the  average  of  the  world.  Assuming  that  average 
to  be  one  dollar,  the  price  in  Illinois,  making  allowance  for 
the  fertility  and  cheapness  of  her  soil,  could  not  fall  below 
an  average  of  seventy-five  cents.  .Indeed  the  experience  of 
the  periods  when  her  consumption  of  grain  has  been  equal 
to  her  production,  as  well  as  that  of  other  sections  where 
the  same  has  been  the  case,  proves  conclusively  that  the 
average  price  of  her  wheat  would  exceed  that  sum. 

We  are  now  ready  to  calculate  the  profit  and  loss.  Illi- 
nois, under  free  trade,  with  her  ''work-shops  in  Europe," 
will  buy  her  cloth  twenty-five  cents  per  yard  cheaper,  and 
thus  make  a  nominal  saving  of  two  hundred  and  fifty  thou- 
sand dollars  in  her  year's  supply;  but,  she  thereby  compels 
herself  to  pay  for  it  in  wheat  at  thirty-live  instead  of 
seventy-five  cents  per  bushel,  or  to  give  over  nine  and  < 
third  bushels  of  wheat  for  every  yard  under  free  trade, 
instead  of  four  and  a  third  under  a  system  of  home  pro- 
duction. In  other  words,  while  she  is  making  a  quarier  of 
a  million  of  dollars  by  buying  her  cloth  <•  where  she  can 
buy  cheapest,"  she  is  losing  nearly  two  millions  of  dollars  on 


CIM-:I-:LKY  ON  PROTKCTION.  10CJ 


tLc  net  product  of  her  grain.  The  striking  of  a  balance 
between  her  profit  and  her  loss  is  certainly  not  a  difficult, 
but  rather  an  unpromising,  operation. 

Or,  let  us  state  the  result  in  another  form:  She  can  buy 
her  cloth  a  little  cheaper  in  England,  —  labor  being  there 
lower,  machinery  more  perfect,  and  capital  more  abundant: 
but,  in  order  to  pay  for  it,  she  must  not  merely  sell  her  own 
products  at  a  correspondingly  low  price,  but  enough  lower 
to  overcome  the  cost  of  transporting  them  from  Illinois  to 
England.  She  will  give  the  cloth-maker  in  England  less 
grain  for  her  cloth  than  she  would  give  to  the  man  who 
made  it  on  her  own  soil;  but  for  every  bushel  she  sends  him 
in  payment  for  his  fabric,  she  must  give  two  to  the  wagoner, 
boatman,  shipper,  and  factor  who  transport  it  thither.  On 
the  whole  product  of  her  industry,  two  thirds  is  tolled  out 
by  carriers  and  bored  out  by  inspectors,  until  but  a  l>e;j;. 
garly  remnant  is  left  to  satisfy  the  fabricator  of  her  goods. 

And  hem  1  trust  I.  have  inside  ohvioiis  to  you  tin;  l-iw 
which  dooms  an  Jigrirulturnl  country  to  inevitable  and 
ruinous  disadvantage  in  exchanging  its  staples  for  manu- 
factures, and  involves  in  it  perpetual  and  increasing  debt 
and  dependence.  The  fact,  I  early  alluded  to;  is  not  the 
rcfwon  now  apparent?  It  is  not  that  agricultural  commu- 
nities are  more  extravagant  or  less  industrious  than  those 
in  which  manufactures  or  commerce  preponderate,  —  it  is 
because  there  is  an  inevitable  disadvantage  to  agriculture  in 
the  very  nature  of  all  distant  exchanges.  Its  products  are 
far  more  perishable  than  any  other;  they  cannot  so  well 
await  a  future  demand;  but  in  their  excessive  bulk  and 
density  is  the  great  evil.  We  have  seen  that,  while  the 
English  manufacturer  can  send  his  fabrics  to  Illinois  for  less 
than  five  per  cent,  on  their  first  cost,  the  Illinois  farmer 
must  pay  two  hundred  per  cent,  on  his  grain  for  its  trans- 
portation to  English  consumers.  In  other  words:  the  Eng- 
lish manufacturer  need  only  produce  his  goods  five  per 


110        HORACE  GREELEY  ON  PROTECTION. 

cent,  below  the  American  to  drive  the  latter  out  of.  t^e 
Illinois  market,  the  Illinoisian  must  produce  wheat  for  one- 
third  of  its  English  price  in  order  to  compete  with  the 
English  and  Polish  grain-grower  in  Birmingham  and  Shef- 
field. 

And  here  is  the  answer  to  that  scintillation  of  free  trade 
wisdom  which  flashes  out  in  wonder  that  manufactures  are 
eternally  and  especially  in  want  of  protection,  while  agricul- 
ture and  commerce  need  none.  The  assumption  is  false  in 
any  sense; — our  commerce  and  navigation  cannot  live  with- 
out protection, — never  did  live  so, — but  let  that  pass.  It  is 
the  interest  of  the  whole  country  which  demands  that  that 
portion  of  its  industry  which  is  most  exposed  to  ruinous 
foreign  rivalry  should  be  cherished  and  sustained.  The 
wheat-grower,  the  grazier,  is  protected  by  ocean  and  land; 
by  the  fact  that  no  foreign  article  can  be  introduced  to  rival 
his  except  at  a  cost  for  transportation  of  some  thirty  to  one 
hundred  per  cent,  on  its  value;  while  our  manufactures  can 
be  inundated  by  foreign  competition  at  a  cost  of  some  two 
to  ten  per  cent.  It  is  the  grain-grower,  the  cattle-raiser,  who 
is  protected  by  a  duty  on  foreign  manufactures,  quite  as 
much  as  the  spinner  or  shoemaker.  He  who  talks  of  manu- 
factures being  protected  and  nothing  else,  might  just  as 
sensibly  complain  that  we  fortify  Boston  and  New  York  and 
not  Pittsburg  and  Cincinnati. 

I  proceed  now  to  set  forth  my 

PPOPOSITION  IV.  That  equilibrium  between  Agriculture, 
Manufactures,  and  Commerce,  which  we  need}  can  only  be  main- 
tained by  means  of  Protective  Duties. 

You  will  have  seen  that  the  object  we  seek  is  not  to  make 
our  country  a  manufacturer  for  other  nations,  but  for  herself, 
— not  to  make  her  the  baker  and  brewer  and  tailor  of  other 
people,  but  of  her  own  household.  If  I  understand  at  all 
the  first  rudiments  of  national  economy,  it  is  best  for  each 


HORACE    GREELEY   ON    PROTECTION.  Ill 

and  all  nations  that  each  should  mainly  fabricate  for  itself, 
freely  purchasing  of  others  all  such  staples  as  its  own  soil 
or  climate  proves  ungenial  to.  We  appreciate  quile  as  well 
as  our  opponents  the  impolicy  of  attempting  to  grow  coffee 
in  Greenland  or  glaciers  in  Malabar, — to  extract  blood  from 
a  turnip  or  sunbeams  from  cucumbers.  A  vast  deal  of  wit 
has  been  expended  on  our  stupidity  by  our  acuter  adversa- 
ries, but  it  has  been  quite  thrown  away,  except  as  it  has 
excited  the  hollow  laughter  of  the  ignorant  as  well  as 
thoughtless.  All  this,  however  sharply  pushed,  falls  wide 
of  our  true  position.  To  all  the  fine  words  we  hear  about 
"the  impossibility  of  counteracting  the  laws  of  nature," 
" trade  regulating  itself,"  etc,  etc.,  we  bow  with  due  defer- 
ence, and  wait  for  the  sage  to  resume  his  argument.  What 
we  do  affirm  is  this,  that  it  is  best  for  every  nation  to  make  at 
home  all  those  articles  of  its  own  consumption-  that  can  just  as 
loell — that  f-,  with  nearly  or  quite  as  little  labor — be  made  there 
as  anywhere  else.  We  say  it  is  not  wise,  it  is  not  well,  to 
send  to  France  for  boots,  to  Germany  for  hose,  to  England 
for  knives  and  forks,  and  so  on;  because  the  real  cost  of 
them  would  be  less, — even  though  the  nominal  price  should 
be  slightly  more, — if  we  made  them  in  our  own  country; 
while  the  facility  of  paying  for  them  would  be  much  greater. 
We  do  not  object  to  the  occasional  importation  of  choice 
articles  to  operate  as  specimens  and  incentives  to  our  own 
artisans  to  improve  the  quality  and  finish  of  their  workman- 
ship,— where  the  home  competition  does  not  avail  to  bring 
the  process  to  its  perfection,  as  it  often  will.  In  such  cases, 
the  rich  and  luxurious  will  usually  be  the  buyers  of  these 
choice  articles,  and  can  afford  to  pay  a  good  duty.  There 
are  gentlemen  of  extra  polish  in  our  cities  and  villages  who 
think  no  coat  good  enough  for  them  which  is  not  woven  in 
an  English  loom, — no  boot  adequately  transparent  which 
has  not  been  fashioned  by  a  Parisian  master.  I  quarrel  not 
with  their  taste  :  I  only  say  that,  since  the  Government  must 


HORACE  GREELEY  ON  PROTECTION. 


have  revenue  and  the  American  artisan  should  have  protec- 
tion, I  am  glad  it  is  so  fixed  that  these  gentlemen  shall 
contribute  handsomely  to  the  former,  and  gratify  their 
aspirations  with  the  least  possible  detriment  to  the  latter. 
It  does  not  invalidate  the  fact  nor  the  efficiency  of  protection 
that  foreign  competition  with  American  workmanship  is  not 
entirely  shut  out.  It  is  the  general  result  which  is  important, 
and  not  the  exception.  Now,  he  who  can  seriously  contend, 
as  some  have  seemed  to  do,  that  protective  duties  do  not  aid 
and  extend  the  domestic  production  of  the  articles  so  pro- 
tected might  as  well  undertake  to  argue  the  sun  out  of  the 
heavens  at  mid-day.  All  experience,  all  common  sense, 
condemn  him.  Do  we  not  know  that  our  manufactures  first 
shot  up  under  the  stringent  protection  of  the  embargo  and 
war  ?  that  they  withered  and  crumbled  under  the  compara- 
tive free  trade  of  the  few  succeeding  years  ?  that  they  were 
revived  and  extended  by  the  tariffs  of  1824  and  '28  ?  Do 
we  not  know  that  Germany,  crippled  by  British  policy, 
which  inundated  her  with  goods  yet  excluded  her  grain  and 
timber,  was  driven,  years  since,  to  the  establishment  of  her 
"  Zoll-Verein  "  or  Tariff  Union,  —  a  measure  of  careful  and 
stringent  protection,  under  which  manufactures  have  grown 
up  and  flourished  through  all  her  many  States  ?  She  has 
adhered  steadily,  firmly,  to  her  protective  policy,  while  we 
have  faltered  and  oscillated  ;  and  what  is  the  result  ?  She 
has  created  and  established  her  manufactures;  and  in  doing 
so  has  vastly  increased  her  wealth  and  augmented  the  reward 
of  her  industry.  Her  public  sentiment,  as  expressed  through 
its  thousand  channels,  is  almost  unanimous  in  favor  of  the 
protective  policy;  and  now,  when  England,  finding  at  length 
that  her  cupidity  has  overreached  itself,  —  that  she  cannot 
supply  the  Germans  witit  clothes  refuse  to  buy  their  bread, 
talks  of  relaxing  her  corn  laws  in  order  to  coax  back  her 
ancient  and  profitable  customer,  the  answer  is,  "  No;  it  is 
now  too  late.  We  have  built  up  home  manufactures  in 


HORACE  GREELEY  ON  PROTECTION.        113 

repelling  your  rapacity, — we  cannot  destroy  them  at  your 
caprice.  What  guarantee  have  we  that,  should  we  accede 
to  your  terms,  you  would  not  return  again  to  your  policy  of 
taking  all  and  giving  none  so  soon  as  our  factories  had 
crumbled  into  ruin  ?  Besides,  we  have  found  that  we  can 
make  cheaper — really  cheaper — than  we  were  able  to  buy, 
— can  pay  better  wages  to  our  laborers,  and  secure  a  better 
and  steadier  market  for  our  products.  We  are  content  to 
abide  in  the  position  to  which  you  have  driven  us.  Pass  on!  " 
But  this  is  not  the  sentiment  of  Germany  alone.  All 
.  Europe  acts  on  the  principle  of  self -protection ;  because  all 
Europe  sees  its  benefits.  The  British  journals  complain 
that,  though  they  have  made  a  show  of  relaxation  in  their 
own  tariff,  and  their  Premier  has  made  a  free  trade  speech 
in  Parliament,  the  chaff  has  caught  no  birds;  but  six  hostile 
tariffs — all  protective  in  their  character,  and  all  aimed  at  the 
supremacy  of  British  manufactures — were  enacted  within 
the  year  1842.  And  thus,  while  schoolmen  plausibly  talk 
of  the  adoption  and  spread  of  free-trade  principles,  and 
their  rapid  advances  to  speedy  ascendency,  the  practical  man 
knows  that  the  truth  is  otherwise,  and  that  many  years  must 
elapse  before  the  great  Colossus  of  manufacturing  monopoly 
will  find  another  Portugal  to  drain  off  her  life-blood  under 
the  delusive  pretense  of  a  commercial  reciprocity.  And, 
while  Britain  continues  to  pour  forth  her  specious  treatises 
on  political  economy,  proving  protection  a  mistake  and  an 
impossibility  through  her  Parliamentary  reports  and  speeches 
in  praise  of  free  trade,  the  shrewd  statesmen  of  other  nations 
humor  the  joke  with  all  possible  gravity,  and  pass  it  on  to 
the  next  neighbor;  yet  all  the  time  take  care  of  their  own 
interests,  just  as  though  Adam  Smith  had  never  speculated 
nor  Peel  soberly  expatiated  on  the  blessings  of  free  trade, 
looking  round  occasionally  with  a  curious  interest  to  see 
whether  anybody  was  really  taken  in  by  it. 

I  have  partly  anticipated,  yet  I  will  state  distinctly,  my 


114  HORACE   GREELEY   ON   PROTECTION. 

PROPOSITION  V.  Protection  is  necessary  and  proper  to  sus- 
tain as  well  as  to  create  a  beneficent  adjustment  of  our  national 
industry. 

"  Why  can't  our  manufacturers  go  alone  ? "  petulantly 
asks  a  free-trader;  "they  have  had  protection  long  enough. 
They  ought  not  to  need  it  any  more."  To  this  I  answer 
that,  if  manufactures  were  protected  as  a  matter  of  special 
bounty  or  favor  to  the  manufacturers,  a  single  day  were  too 
long.  I  would  not  consent  that  they  should  be  sustained 
one  day  longer  than  the  interests  of  the  ivhole  country 
required.  I  think  you  have  already  seen  that,  not  for  the" 
sake  of  manufacturers,  but  for  the  sake  of  all  productive 
labor,  should  protection  be  afforded.  If  I  have  been  intel- 
ligible, you  will  have  seen  that  the  purpose  and  essence  of 
protection  is  LABOR-SAVING, — the  making  two  blades  of  grass 
grow  instead  of  one.  This  it  does  by  "  planting  the  manu- 
facturer as  nearly  as  may  be  by  the  side  of  the  farmer,"  as 
Mr.  Jefferson  expressed  it,  and  thereby  securing  to  the  latter 
a  market  for  which  he  had  looked  to  Europe  in  vain.  Now, 
the  market  of  the  latter  is  certain  as  the  recurrence  of 
appetite;  but  that  is  not  all. 

But  why  is  a  tariff  necessary  after  manufactures  are  once 
established?  "  You  say,"  says  a  free-trader,  "that  you  can 
manufacture  cheaper  if  protected  than  we  can  buy  abroad; 
then  why  not  do  it  without  protection,  and  save  all  trouble?  " 
Let  me  answer  this  cavil: — 

I  will  suppose  that  the  manufactures  of  this  country 
amount  in  value  to  one  hundred  millions  of  dollars  per 
annum,  and  those  of  Great  Britain  to  three  hundred  millions. 
Let  us  suppose  also  that,  under  an  efficient  protective  tariff, 
ours  are  produced  five  per  cent,  cheaper  than  those  of  Eng- 
land, and  that  our  own  markets  are  supplied  entirely  from 
the  home  product.  But  at  the  end  of  this  year,  1843,  weL— 
concluding  that  our  manufactures  have  been  protected  long 
enough  and  ought  now  to  go  alone, — repeal  absolutely  our 


HORACE  GREELEY  ON  PROTECTION.        115 

tariff,  and  commit  our  great  interests  thoroughly  to  the 
guidance  of  "free  trade."  Well;  at  this  very  time  the 
British  manufacturers,  on  making  up  the  account  and  review 
of  their  year's  business,  find  that  they  have  manufactured 
goods  costing  them  three  hundred  millions,  as  aforesaid,  and 
have  sold  to  just  about  that  amount,  leaving  a  residue  or 
surplus  on  hand  of  fifteen  or  twenty  millions'  worth.  These 
are  to  be  sold;  and  their  net  proceeds  will  constitute  the 
interest  on  their  capital  and  the  profit  on  their  year's  busi- 
ness. But  where  shall  they  be  sold?  If  crowded  on  the 
home  or  their  established  foreign  markets,  they  will  glut 
and  depress  those  markets,  causing  a  general  decline  of 
prices  and  a  heavy  loss,  not  merely  on  this  quantity  of 
goods,  but  on  the  whole  of  their  next  year's  business.  They 
know  better  than  to  do  &ny  such  thing.  Instead  of  it,  they 
say,  u  Here  is  the  American  market  just  thrown  open  to  us 
by  a  repeal  of  their  tariff;  let  us  send  thither  our  surplus, 
and  sell  it  for  what  it  will  fetch."  They  ship  it  over  accord- 
ingly, and  in  two  or  three  weeks  it  is  rattling  off  through 
our  auction  stores,  at  prices  first  five,  then  ten,  fifteen,  twenty, 
and  down  to  thirty  per  cent,  below  our  previous  rates. 
Every  jobber  and  dealer  is  tickled  with  the  idea  of  buying 
goods  of  novel  patterns  so  wonderfully  cheap;  and  the  sale 
proceeds  briskly,  though,  at  constantly  declining  prices,  till 
the  whole  stock  is  disposed  of  and  our  market  is  gorged  to 
repletion. 

Now,  the  British  manufacturers  may  not  have  received 
for  the  whole  twenty  millions'  worth  of  goods  over  fourteen 
or  fifteen  millions,  but  what  of  it?  Whatever  it  may  be  is 
clear  profit  on  their  year's  business  in  cash  or  its  full  equiv- 
alent. All  their  established  markets  are  kept  clear  and 
eager;  and  they  can  now  go  on  vigorously  and  profitably 
with  the  business  of  the  new  year.  But  more;  they  have 
crippled  an  active  and  growing  rival;  they  have  opened  a 
new  market,  which  shall  ere  long  be  theirs  also. 


116  HORACE    GREELEY    ON    PROTECTION. 

Let  us  now  look  at  our  side  of  the  question: — 
The  American  manufacturers  have  also  a  stock  of  goods 
on  hand,  and  they  come  into  our  market  to  dispose  of  them. 
But  they  suddenly  nnd  that  market  forestalled  and  depressed 
by  rival  fabrics  of  attractive  novelty,  and  selling  in  profu- 
sion at  prices  which  rapidly  run  down  to  twenty-five  per 
cent,  below  cost.  What  are  they  to  do?  They  cannot  force 
sales  at  any  price  not  utterly  ruinous;  there  is  no  demand  at 
any  rate.  They  cannot  retaliate  upon  England  the  mischief 
they  must  suffer, — her  tariff  forbids;  and  the  other  markets 
of  the  world  are  fully  supplied',  and  will  bear  but  a  limited 
pressure.  The  foreign  influx  has  created  a  scarcity  of 
money  as  well  as  a  plethora  of  goods.  Specie  has  largely 
been  exported  in  payment,  which  has  compelled  the  banks 
to  contract  and  deny  loans.  Still,  their  obligations  must  be 
met;  if  they  cannot  make  sales,  the  sheriff  will,  and  must. 
It  is  not  merely  their  surplus,  but  their  whole  product, 
which  has  been  depreciated  and  made  unavailable  at  a  blow. 
The  end  is  easily  foreseen;  our  manufacturers  become  bank- 
rupt and  are  broken  up;  their  works  are  brought  to  a  dead 
stand;  the  laborers  therein,  after  spending  months  in  con- 
strained idleness,  are  driven  by  famine  into  the  Western 
wilderness,  or  into  less  productive  and  less  congenial  voca- 
tions; their  acquired  skill  and  dexterity,  as  well  as  a  portion 
of  their  time,  are  a  dead  loss  to  themselves  and  the  com- 
munity; and  we  commence  the  slow  and  toilsome  process  of 
rebuilding  and  rearranging  our  industry  on  the  one-sided  or 
agricultural  basis.  Such  is  the  process  which  we  have  un- 
dergone twice  already.  How  many  repetitions  shall  satisfy 
us? 

Now,  will  any  man  gravely  argue  that  we  have  made  five 
or  six  millions  by  this  cheap  purchase  of  British  goods, — by 
" buying  where  we  could  buy  cheapest?"  Will  he  not  see 
that,  though  the  price  was  low,  the  cost  is  very  great?  But 
the  apparent  saving  is  doubly  deceptive;  for  the  British 


HORACE   GREELEY    ON    PROTECTION.  117 


manufacturers,  having  utterly  crushed  their  American  rivals 
by  one  or  two  operations  of  this  kind,  soon  find  here  a  mar- 
ket, not  for  a  beggarly  surplus  of  fifteen  or  twenty  millions, 
but  they  have  now  a  demand  for  the  amount  of  our  whole 
consumption,  which,  making  allowance  for  our  diminished 
ability  to  pay,  would  probably  still  reach  fifty  millions  per 
annum.  This  increased  demand  would  soon  produce  activ- 
ity and  buoyancy  in  the  general  market;  and  now  the  for- 
eign manufacturers  would  say  in  their  consultations,  "  We 
have  sold  some  millions'  worth  of  goods  to  America  for  less 
than  cost,  in  order  to  obtain  control  of  that  market;  now  we 
have  it,  and  must  retrieve  our  losses," — and  they  would  re 
trieve  them,  with  interest.  They  would  have  a  perfect  right 
to  do  so.  I  hope  no  man  has  understood  me  as  implying 
any  infringement  of  the  dictates  of  honesty  on  their  part, 
still  less  of  the  laws  of  trade.  They  have  a  perfect  right  to 
sell  goods  in  our  markets  on  such  terms  as  we  prescribe  and 
they  can  afford;  it  is  we,  who  set  up  our  own  vital  interests 
to  be  bowled  down  by  their  rivalry,  who  are  alone  to  be 
blamed. 

Who  does  not  see  that  this  sending  out  our  great  industrial 
interests  unarmed  and  unshielded  to  battle  against  the  mail- 
clad  legions  opposed  to  them  in  the  arena  of  trade  is  to  insure 
their  destruction?  It  were  just  as  wise  to  say  that,  because  our 
people  are  brave,  therefore  they  shall  repel  any  invader 
without  fire-arms,  as  to  say  that  the  restrictions  of  other 
nations  ought  not  to  be  opposed  by  us  because  our  artisans 
are  skillful  and  our  manufactures  have  made  great  advances. 
The  very  fact  that  our  manufactures  are  greatly  extended 
and  improved  is  the  strong  reason  why  they  should  not  be 
exposed  to  destruction.  If  they  were  of  no  amount  or 
value,  their  loss  would  be  less  disastrous;  but  now  the  five 
or  six  millions  we  should  make  on  the  cheaper  importation 
of  goods  would  cost  us  one  hundred  millions  in  the  destruc- 
tion of  manufacturing  property  alone. 


118        HORACE  GREELEY  ON  PROTECTION. 

Yet  this  is  but  an  item  of  our  damage.  The  manufactur- 
ing classes  feel  the  first  effect  of  the  blow,  but  it  would  par- 
alyze every  muscle  of  society.  One  hundred  thousand  arti- 
sans and  laborers,  discharged  from  our  ruined  factories, 
after  being  some  time  out  of  employment,  at  a  waste  of  mil- 
lions of  the  national  wealth,  are  at  last  driven  by  famine  to 
engage  in  other  avocations, — of  course  with  inferior  skill  and 
at  an  inferior  price.  The  farmer,  gardener,  grocer,  lose  them 
as  customers  to  meet  them  as  rivals.  They  crowd  the  labor- 
markets  of  those  branches  of  industry  which  we  are  still 
permitted  to  pursue,  just  at  the  time  when  the  demand  for 
their  products  has  fallen  off,  and  the  price  is  rapidly  declin- 
ing. The  result  is  just  what  we  have  seen  in  a  former 
instance:  all  that  any  man  may  make  by  buying  foreign  goods 
cheap,  he  loses  ten  times  over  by  the  decline  of  his  own  prop- 
erty, product,  or  labor,  while  to  nine-tenths  of  the  whole 
people  the  result  is  unmixed  calamity.  The  disastrous  con- 
sequences to  a  nation  of  the  mere  derangement  and  paralysis 
of  its  industry  which  must  follow  the  breaking  down  of  any 
of  its  great  producing  interests  have  never  yet  been  suffi- 
ciently estimated.  Free  trade,  indeed,  assures  us  that  every 
person  thrown  out  of  employment  in  one  place  or  capacity 
has  only  to  choose  another;  but  almost  every  workingman 
knows  from  experience  that  such  is  not  the  fact, — that  the 
loss  of  situation  through  the  failure  of  his  business  is  often  a 
sore  calamity.  I  know  a  worthy  citizen  who  spent  six  years 
in  learning  the  trade  of  a  hatter,  which  he  had  just  perfected 
in  1798,  when  an  immense  importation  of  foreign  hats  utterly 
paralyzed  the  manufacture  in  this  country.  He  traveled  and 
sought  for  months,  but  could  find  no  employment  at  any 
price,  and  at  last  gave  up  the  pursuit,  found  work  in  some 
other  capacity,  and  has  never  made  a  hat  since.  He  lives 
yet,  and  now  comfortably,  for  he  is  industrious  and  frugal; 
but  the  six  years  he  gave  to  learn  his  trade  were  utterly  lost 
to  him, — lost  for  the  want  of  adequate  and  steady  protection 


HORACE  GREELEY  ON  PROTECTION.        119 

to  home  industry.  I  insist  that  the  government  has  failed 
of  discharging  its  proper  and  rightful  duty  to  that  citizen 
and  to  thousands  and  tens  of  thousands  who  have  suffered 
from  like  causes.  I  insist  that,  if  the  government  had  per- 
mitted without  complaint  a  foreign  force  to  land  on  our 
shores  and  plunder  that  man's  house  of  the  savings  of  six 
years  of  faithful  industry,  the  neglect  of  duty  would  not  have 
been  more  flagrant.  And  I  firmly  believe  that  the  people  of 
this  country  are  one  thousand  millions  of  dollars  poorer  at 
this  moment  than  they  would  have  been  had  their  entire  pro- 
ductive industry  been  constantly  protected,  on  the  principles 
I  have  laid  down,  from  the  formation  of  the  government  till 
now.  The  steadiness  of  employment  and  of  recompense  thus 
secured,  the  comparative  absence  of  constrained  idleness,  and 
the  more  efficient  application  of  the  labor  actually  performed, 
would  have  vastly  increased  the  product, — would  have 
improved  and  beautified  the  whole  face  of  the  country;  and 
the  moral  and  intellectual  advantages  thence  accruing  would 
alone  have  been  inestimable.  A  season  of  suspension  of 
labor  in  a  community  is  usually  one  of  aggravated  dissipation, 
drunkenness,  and  crime. 

But  let  me  more  clearly  illustrate  the  effect  of  foreign 
competition  in  raising  prices  to  the  consumer.  To  do  this  I 
will  take  my  own  calling  for  an  example,  because  I  under- 
stand that  best;  though  any  of  you  can  apply  the  principle 
to  that  with  which  he  may  be  better  acquainted.  I  am  a 
publisher  of  newspapers,  and  suppose  I  afford  them  at  a 
cheap  rate.  But  the  ability  to  maintain  that  cheapness  is 
•  based  on  the  fact  that  I  can  certainly  sell  a  large  edition 
daily;  so  that  no  part  of  that  edition  shall  remain  a  dead  loss 
on  my  hands.  Now,  if  there  were  an  active  and  formidable 
foreign  competition  in  newspapers — if  the  edition  which  I 
printed  during  the  night  were  frequently  rendered  unsalable 
by  the  arrival  of  a  foreign  ship  freighted  with  newspapers 
early  in  the  morning, — the  present  rates  could  not  be  con- 


120        HORACE  GREELEY  ON  PROTECTION. 

tinned:  the  price  must  be  increased  or  the  quality  would 
decline.  I  presume  this  holds  equally  good  of  the  production 
of  calicoes,  glass,  and  penknives,  as  of  newspapers,  though  it 
may  be  somewhat  modified  by  the  nature  of  the  article  to 
which  it  is  applied.  That  it  does  hold  true  of  sheetings,  nails, 
and  thousands  of  articles,  is  abundantly  notorious. 

I  have  not  burdened  you  with  statistics, — you  know  they 
are  the  reliance,  the  stronghold,  of  the  cause  of  protection, 
and  that  we  can  produce  them  by  acres.  My  aim  has  been 
to  exhibit  not  mere  collections  of  facts,  however  pertinent 
and  forcible,  but  the  laws  on  which  those  facts  are  based, — 
not  the  immediate  manifestation,  but  the  ever-living  neces- 
sity from  which  it  springs.  The  contemplation  of  these  laws 
assures  me  that  those  articles  which  are  supplied  to  us  by 
home  production  alone  are  relatively  cheaper  than  those  which 
are  rivaled  and  competed  with  from  abroad.  And  I  am 
equally  confident  that  the  shutting  out  of  foreign  competition 
from  our  markets  for  other  articles  of  general  necessity  and 
liberal  consumption  which  can  be  made  here  with  as  little 
labor  as  anywhere,  would  be  followed  by  a  corresponding 
result, — a  reduction  of  the  price  to  the  consumer  at  the  same 
time  with  increased  employment  and  reward  to  our  produc- 
ing classes. 

But,  Mr.  President,  were  this  only  on  one  side  true, — were 
it  certain  that  the  price  of  the  home  product  would  be  perma- 
nently higher  than  that  of  the  foreign,  I  should  still  insist  on 
efficient  protection,  and  for  reasons  I  have  sufficiently  shown. 
Grant  that  a  British  cloth  costs  $3  per  yard,  and  a  corres- 
ponding American  fabric  $4,  I  still  hold  that  the  latter 
would  be  decidedly  the  cheaper  for  us.  The  fuel,  timber, 
fruits,  vegetables,  etc.,  which  make  up  so  large  a  share  of  the 
cost  of  the  home  product,  would  be  rendered  comparatively 
valueless  by  having  our  work-shops  in  Europe.  I  look  not 
so  much  to  the  nominal  price  as  to  the  comparative  facility 
of  payment.  And,  where  cheapness  is  only  to  be  attained  by 


HORACE   GREELEY   ON   PROTECTION.  121 

a  depression  of  the  wages  of  labor  to  the  neighborhood  of 
the  European  standard,  I  prefer  that  it  should  be  dispensed 
with.  One  thing  must  answer  to  another;  and  I  hold  that 
the  farmers  of  this  country  can  better  afford,  as  a  matter  of 
pecuniary  advantage,  to  pay  a  good  price  for  manufactured 
articles  than  to  obtain  them  lower  through  the  depression 
and  inadequacy  of  the  wages  of  the  artisan  and  laborer. 

But  even  this  is  not  the  worst  feature  of  the  case.  The 
labor  which  we  have  here  thrown  out  of  employment  by  the 
cheap  importation  of  this  article  is  now  ready  to  be  employed 
again  at  any  price, —  if  not  one  that  will  afford  bread  and 
straw,  then  it  must  accept  one  that  will  produce  potatoes  and 
rubbish;  and  with  the  product  some  free-trader  proceeds  to 
break  down  the  price  and  destroy  the  reward  of  similar  labor 
in  some  other  portion  of  the  earth.  And  thus  each  depression 
of  wages  produces  another,  and  that  a  third,  and  so  on, 
making  the  circuit  of  the  globe, — the  aggravated  necessities 
of  the  poor  acting  and  reacting  upon  each  other,  increasing 
the  omnipotence  of  capital  and  deepening  the  dependence  of 
labor,  swelling  and  pampering  a  bloated  and  factitious 
commerce,  grinding  down  and  grinding  down  the  destitute, 
until  Maltha's  remedy  for  poverty  shall  become  a  grateful 
specific,  and  amid  the  splendors  and  luxuries  of  an  all-devour- 
ing commercial  feudalism,  the  squalid  and  famished  mil- 
lions,  its  dependants  and  victims,  shall  welcome  death  as  a 
deliverer  from  their  sufferings  and  despair. 

I  wish  time  permitted  me  to  give  a  hasty  glance  over  the 
doctrines  and  teachings  of  the  free-trade  sophists,  who 
esteem  themselves  the  political  economists,  christen  their  own 
views  liberal  and  enlightened,  and  complacently  put  ours 
aside  as  benighted  and  barbarous.  I  should  delight  to  show 
you  how  they  mingle  subtle  fallacy  with  obvious  truth,  how 
they  reason  acutely  from  assumed  premises,  which,  being 
mistaken  or  incomplete,  lead  to  false  and  often  absurd  con- 
clusions,— how  they  contradict  and  confound  each  other,  and 
6 


122  HORACE    GREELEY    ON    PROTECTION. 

often,  from  Adam  Smith,  their  patriarch,  down  to  McCul- 
loch  and  Ricardo,  either  make  admissions  which  undermine 
their  whole  fabric,  or  confess  themselves  ignorant  or  in  the 
dark  on  points  the  most  vital  to  a  correct  understanding  of 
the  great  subject  they  profess  to  have  reduced  to  a  science. 
Yet  even  Adam  Smith  himself  expressly  approves  and  justifies 
the  British  navigation  act.  the  most  aggressively  protective 
measure  ever  enacted, — a  measure  which,  not  being  under- 
stood and  seasonably  counteracted  by  other  nations,  changed 
for  centuries  the  destinies  of  the  world, — which  silently  sapped 
and  overthrew  the  commercial  and  political  greatness  of  Hol- 
land,— which  silenced  the  thunder  of  Van  Tromp,  and  swept 
the  broom  from  his  mast-head.  But  I  must  not  detain  you 
longer.  I  do  not  ask  you  to  judge  of  this  matter  by  author- 
ity, but  from  facts  which  come  home  to  your  reason  and 
your  daily  experience.  There  is  not  an  observing  and 
strong-minded  mechanic  in  our  city  who  could  not  set  any 
one  of  these  doctors  of  the  law  right  on  essential  points.  I 
beg  you  to  consider  how  few  great  practical  statesmen  they 
have  ever  been  able  to  win  to  their  standard,  —  I  might 
almost  say  none ;  for  Huskisson  was  but  a  nominal  disciple, 
and  expressly  contravened  their  whole  system  upon  an 
attempt  to  apply  it  to  the  corn  laws;  and  Calhoun  is  but  a 
free  trader  by  location,  and  has  never  yet  answered  his  own 
powerful  arguments  in  behalf  of  protection.  On  the  other 
hand,  we  point  you  to  the  long  array  of  mighty  names  which 
have  illustrated  the  annals  of  statesmanship  of  modern  times, 
—  to  Chatham,  William  Pitt,  and  the  Great  Frederick  of 
Prussia;  to  the  whole  array  of  memorable  French  states- 
men, including  Napoleon  the  first  of  them  all;  to  our  own 
Washington,  Hamilton,  Jefferson,  and  Madison;  to  our 
two  Clintons,  Tompkins,  to  say  nothing  of  the  eagle-eyed 
and  genial-hearted  living  masterspirit  [Henry  Clay]  of  our 
time.  The  opinions  and  the  arguments  of  all  these  are  on 
record;  it  is  by  hearkening  to  and  heeding  their  counsels  that 


HORACE  GREELEY  ON  PROTECTION.        123 

we  shall  be  prepared  to  walk  in  the  light  of  experience  and 
look  forward  to  a  glorious  national  destiny.  My  friends!  I 
dare  not  detain  you  longer.  I  commit  to  you  the  cause  of  the 
Nation's  independence,  of  her  stability  and  her  prosperity. 
Guard  it  wisely  and  shield  it  well;  for  it  involves  your  own 
happiness  and  the  enduring  welfare  of  your  countrymen! 


CHAPTER  VII. 

PROTECTING   DUTIES.* 

BY  FRANCIS  WAYLAND,  D.D.,  LL.D., 

President  of  Brown  University. 


ON     THE     EFFECTS     OF     DIRECT     LEGISLATION    AS     A     MEANS     OF 
INCREASING    PRODUCTION. 

I  HAVE  thus  far  said  nothing  upon  the  effect  of  legisla- 
tive enactments,  by  means  of  bounties  and  protecting 
duties,  as  a  means  of  increasing  production.  The  reason  is, 
that  I  have  not  yet  been  able  to  discover  in  what  manner 
they  produce  this  effect.  Nevertheless,  since  many  persons 
suppose  them  to  be  of  great  importance,  it  might  seem  that 
a  discussion  of  this  subject  was  incomplete,  if  they  were 
passed  over  in  silence.  I  shall  devote  this  section  to  a  con- 
sideration of  their  effects. 

1.  Duties  of  this  sort  are  to  be  considered  apart  from 
those  levied  for  the  support  of  government,  because  they 
are  either  not  necessary  for  this  purpose,  or  else  they  are 
levied  for  a  different  object.  Thus,  if  five  per  cent,  on  an 
import  be  necessary  to  the  support  of  government,  and  ten 
per  cent,  be  levied,  in  order  to  favor,  or,  as  it  is  said,  to 
protect  one  branch  of  industry,  the  additional  five  per  cent, 
is  levied  for  a  distinct  object,  aside  from  that  of  the  support 
of  government.  It  is  only  this  latter  part  of  the  duty 
which  we  propose  to  consider;  that  is,  so  much  of  the  duty 

*  Elements  of  Political  Economy,  1441. 

(124) 


PROTECTING    DUTIES.  125 

as   is   levied   for   the   purpose  of   favoring   one   particular 
product. 

2.  Now,   if  such  a  duty  have  any  effect  upon  the  pro- 
ductiveness  of  a  nation,  it  must  be  in  one  of  these  ways.    It 
must   either   first   increase   the   capital   of    a   country,    or, 
secondly,  increase  its  number  of  laborers;  or,  third,  create 
a  greater  stimulus  to  labor.     I  think  it  evident,  from  what 
has  already  been  shown,  that  every  condition  which  affects 
production,  must  exert  its  influence  in  one  of  these  three 
methods. 

3.  I  think  it  evident  that  legislation  of  this  sort  cannot 
increase  the  capital  of  a  country.     The  capital  of  a  country, 
at  any  moment,  is  its  present  amount  of  annual  and  fixed 
capital.     Now,  a  law  cannot  create  capital;  since,  if  it  could, 
there  would  be  no  necessity  for  any  other  labor  than  that  of 
legislation;  and,  in  order  to  grow  rich,  a  nation  would  have 
nothing  to  do  but   meet  in  public  assembly,  and  spend  its 
whole  time  in  making  and  hearing  speeches,  and  enacting 
laws.     I  believe,  however,  that  this  mode  of  growing  rich, 
has  never  been  found  remarkably  successful. 

If  it  be  said  that,  in  this  manner,  we  shall  attract  foreign 
capital  to  our  own  county,  I  answer,  this  depends  not  upon 
legislation,  but  upon  the  rate  of  interest,  and  the  security  of 
property.  If  these  conditions  be  more  favorable  here  than 
in  another  country,  capital  will  flow  hither.  If  they  be 
more  favorable  in  another  country  than  here,  it  will  flow 
thither.  The  system  of  Great  Britain  has  been  exclusive, 
but  capital  does  not  go  from  this  country  to  be  invested 
there. 

4.  Legislation  of  this  kind  cannot  increase  the  actual 
number  of  laborers.     The   number   of   laborers   is   as   the 
number  of   inhabitants.     Legislation  has   never  been  sup- 
posed to  have  any  power  to  create  men.     It  is  true,  popula- 
lation  is  found  always  to  increase  with  the  increase  of  means 
of  living;  that  is,  with  the  increase  of  the  productiveness  of 


126  PROTECTING    DUTIES. 

labor.  Population  will  increase  or  diminish,  just  in  propor- 
tion as  a  laborer  is  able  to  procure  greater  or  less  wages  for 
a  day's  labor;  that  is,  as  everything  is  cheaper  or  dearer. 
Whether  the  tendency  of  duties  is  to  render  productions 
cheap,  remains  to  be  considered.  It  must,  however,  be  evi- 
dent to  all,  that  laws  do  not  create  human  beings ;  of  course, 
they  add  nothing  to  the  number  of  laborers;  that  is,  of 
human  beings  in  a  country. 

It  may  be  said,  we  may  thus  induce  laborers  to  come 
from  other  countries.  To  this  it  may  be  answered,  this  will 
depend  upon  the  wages  of  labor.  If  laborers  be  better  paid 
here  than  elsewhere,  they  will  come  here,  and  not  otherwise. 
Besides,  what  is  called  protection  changes  only  the  mode  of 
labor;  that  is,  it  takes  men  from  one  mode  of  labor,  to 
employ  them  upon  another.  Suppose,  then,  that  it  attracts 
foreign  laborers  to  one  branch  of  industry,  it  deters  those 
in  another  branch  of  industry  from  immigrating.  If,  for 
instance,  manufacturers  are  protected,  this  will  tend  to 
encourage  manufacturers  to  immigrate ;  but  it  will,  in  a 
correspondent  proportion,  discourage  agriculturists. 

5.  If,  then,  discriminating  duties  produce  any  effect  upon 
production,  it  must  be  by  stimulating  industry;  that  is,  while 
the  amount  of  capital  and  the  number  of  laborers  remain 
the  same,  by  stimulating  men  to  labor  more  industriously, 
and  thus  to  create  a  greater  amount  of  production  than  they 
would  under  other  circumstances.  This,  I  believe,  is  sup- 
posed to  be  the  way  in  which  the  system  produces  its  effect. 
This  is  the  point  of  view  in  which  we  shall  now  proceed  to 
consider  it. 

The  manner  in  which  this  is  done,  is  the  following:  Sup- 
pose a  country  to  be  under  a  free  system,  and  that  every  one 
is  devoting  himself  to  agriculture,  commerce,  or  manufac- 
tures, as  he  finds  it  the  most  for  his  interest;  under  these 
circumstances,  there  will  be  a  certain  average  of  productive- 
ness, both  of  labor  and  of  capital.  Woolen  cloth  can  be 


PROTECTING   DUTIES.  127 

procured,  by  exchange,  for  five  dollars  a  yard;  but  it  can- 
not, in  the  present  state  of  the  country,  be  manufactured  for 
less  than  ten  dollars  a  yard;  that  is,  capital  and  labor  are, 
in  everything  else,  so  productive,  that  they  could  not  be 
abstracted  from  other  employments  at  the  same  rate  of 
profit,  unless  the  manufacturer  could  receive  ten  dollars  a 
yard  for  his  cloth.  Now  suppose,  that,  in  order  to  enable 
him  to  do  this,  a  duty  of  five  dollars  a  yard  is  levied  on 
imported  cloth,  by  which  the  price  of  all  cloth  is  raised  to 
ten  dollars  a  yard,  that  it  may  be  in  the  power  of  the  manu- 
facturer, to  employ  his  capital  and  labor  in  this  manner. 
There  is  no  doubt  that  thus  the  manufacture  of  cloth 
might  be  established. 

Now  I  think  it  is  evident,  upon  inspection,  that  the  pro- 
ductiveness of  labor  is  not,  by  this  operation,  increased. 
The  reason  why  cloth  was  not  manufactured  before,  was, 
that  the  productiveness  of  labor  and  capital,  in  this  mode 
of  investment,  was  lower  than  the  average  productiveness  of 
labor  and  capital  in  other  modes  of  investment.  All  that 
has  been  effected  is,  to  raise  the  productiveness  here  to  the 
general  average  elsewhere.  There  has  been  nothing  done 
to  render  it  any  greater,  either  in  this  or  in  any  other  employ, 
ment;  for  I  presume  that  no  one  will  contend,  that  one  kind 
of  industry  should  be  really  more  highly  paid  than  another; 
nor  that,  if  it  were  desired,  it  could  be  effected  without  the 
aid  of  a  direct  monopoly. 

But  the  mannfacturer  now  gets  ten  dollars  for  that  which 
before  would  bring  only  five.  Let  us  inquire  whence  this 
additional  five  dollars  comes. 

It  is  evident  that  government  possesses  nothing.  All  that 
it  possesses  is  precisely  so  much  taken  from  the  annual 
revenue  of  individuals.  In  this  case,  therefore,  it  really 
bestows  nothing,  but  only  causes  a  transfer  of  annual  reve- 
nues, from  one  party  to  another.  The  case  is,  therefore,  the 
same  as  it  would  be  if,  while  there  had  been  no  duty 


128  PROTECTING   DUTIES. 

imposed,  every  man  had  been  allowed  to  buy  cloth  for  five 
dollars  a  yard,  but  had  been  obliged,  for  every  yard  that  he 
bought,  to  pay  five  dollars  to  the  manufacturer.  It  would 
be  the  same  thing  to  both  parties  as  at  present.  The  con- 
sumer would  then,  as  now,  pay  ten  dollars  a  yard  for  cloth, 
arid  the  manufacturer  might  sell  it  for  five,  if  he  received 
five  more  as  a  gratuity.  The  five  dollars  that  have  been 
added  to  the  revenue  of  the  one,  are  precisely  five  dollars 
taken  from  the  revenue  of  the  other. 

Now,  if  this  be  the  fact,  inasmuch  as  what  is  added  to 
the  productiveness  of  the  industry  of  the  one  class,  is  taken 
from  the  productiveness  of  the  industry  of  the  other  class, 
it  would  seem  that  what  the  one  has  gained,  the  other  hag 
lost;  and  hence,  that  there  can  be  no  increased  stimulus  to 
industry  on  the  whole,  since,  by  as  much  as  the  one  is 
stimulated,  the  other  is  depressed.  But  this  is  not  all. 
What  you  have  given  to  the  one  class  has  only  raised  his 
mode  of  labor  to  the  point  of  productiveness  at  which  that, 
of  all  the  other  classes  existed  before;  while  the  means  by 
which  this  has  been  effected,  has,  to  the  whole  amount  of  its 
effect,  reduced  the  productiveness  of  all  the  other  classes 
lower  than  it  was  before.  By  just  as  much  as  this  produc- 
tiveness has  been  diminished,  by  so  much  has  the  stimulus 
to  industry  been,  upon  the  whole,  decreased. 

But  secondly;  As  the  price  of  the  article  is  increased,  the 
demand  for  the  article  is  diminished.  This  has  been  before 
illustrated.  There  will,  therefore,  be  less  of  the  article  pro- 
duced, because  less  of  it  is  wanted.  By  all  this  diminution 
is  the  demand  for  labor  diminished ;  the  price  of  labor  must, 
therefore,  fall,  and  the  stimulus  to  labor  be,  by  so  much, 
decreased. 

This  effect  will  take  place,  in  what  manner  soever  the  dis- 
criminating duty  may  operate.  Suppose,  that  from  scarcity 
of  wool,  the  price  of  imported  cloth  had,  without  any  duty, 
been  doubled.  The  result  would  have  been,  that  the  demand 


PROTECTING    DUTIES.  129 

would  so  have  fallen  off,  that  multitudes  would  have  been 
thrown  out  of  employment,  and  whole  establishments  would 
have  been  ruined.  Suppose  that,  by  a  duty,  we  exclude  the 
foreign  cloth,  and  make  it  ourselves,  but  at  double  the  price. 
There  will  be  a  less  quantity  made  than  before.  But  the 
imported  cloth  was  not  to  be  had  for  nothing.  Some  of  our 
own  population  were  obliged  to  raise  the  products  which  we 
sent  in  exchange  for  it.  As  we  do  not  take  their  cloth,  they 
cannot  take  our  produce.  Of  course,  all  those  who  labored 
in  the  products  which  were  exchanged  for  cloth,  are  out  of 
employment.  There  was  a  demand  for  a  sufficient  amount 
of  their  labor  to  purchase  one  thousand  bales  of  cloth;  sup- 
pose, now,  there  is  a  demand  for  labor  sufficient  to  make  only 
five  hundred  bales  of  cloth.  By  all  the  difference,  there- 
fore, between  the  labor  necessary  to  procure  one  thousand 
bales  by  exchange,  and  that  necessary  to  manufacture,  or 
procure  by  exchange,  five  hundred  bales,  is  the  demand  for 
industry  diminished,  and,  of  course,  the  stimulus  to  industry 
weakened. 

We  see,  then,  what  is  the  tendency  of  a  system  of  this 
kind.  First,  so  far  as  the  manufacturer  is  concerned,  it  can- 
not increase  his  profit  beyond  the  average  profits  of  every 
other  employment;  for,  if  competition  be  allowed,  capital 
and  labor  will  flow  into  it,  whatever  may  be  its  advantages, 
until  its  profits  fall  to  the  general  level.  Secondly,  the 
demand  for  other  labor  is  diminished,  by  the  reduced  con- 
sumption created  by  a  rise  of  price,  and  also,  as  this  rise  of 
price  increases  the  expenses  of  living,  it  makes  even  these 
reduced  wages  of  less  value  than  they  were  before.  Hence 
the  tendency  is,  to  reduce  the  profit  of  capital  and  of  labor 
in  the  whole  community  lower  than  they  were  before  such 
duty  was  imposed.  To  this  reduced  average,  manufacturers 
must  themselves  conform;  and  hence,  by  this  very  operation, 
they  themselves  must  suffer.  Hence  we  see  the  reason  why, 
when  once  a  duty  is  imposed  for  the  protection  of  a 


130  PROTECTING    DUTIES. 

particular  branch  of  manufactures,  it  is  not  long  before  a 
larger  protective  duty  is  demanded;  and  also  why  a  pro- 
tective duty,  which  at  first  is  followed  by  great  manufactur- 
ing enterprise  and  success,  is  so  commonly  afterwards 
followed  by  so  universal  a  depression  of  manufacturing 
industry. 

This  is  the  result,  so  far  as  the  effect  upon  our  own  country 
is  concerned.  But  this  is  not  all.  A  rise  of  prices  must,  of 
necessity,  follow  a  protecting  duty;  for  this  is  its  very  object. 
Its  object  is,  to  raise  the  price  of  some  particular  product, 
so  that  it  may  be  created  where  it  could  not  be  created 
before.  If  it  produce  no  rise  of  prices  it  is  useless.  Now, 
a  rise  of  prices  raises  the  cost  of  production,  and,  by  its 
whole  effect,  must  raise  the  price  of  every  product  which 
we  create.  By  this  whole  effect,  therefore,  is  our  foreign 
market  injured.  If  we  can  raise  cotton  at  ten  cents  a  pound, 
and  bring  it  into  market  as  cheap  as  other  nations,  we  have 
as  good  an  opportunity  as  they  for  selling  it.  If  we  can 
raise  it  at  nine  cents,  we  can  undersell  them,  and  supply  the 
whole  market;  or.  if  we  sell  it  at  the  same  price  as  before, 
we  gain  one  cent  more  on  the  pound.  If,  by  increase  of  the 
expenses  of  living,  we  cannot  raise  it  for  less  than  eleven 
cents  a  pound,  they  will  undersell  us,  and  we  shall  be  obliged 
to  give  up  the  raising  of  cotton,  either  partially  or  altogether; 
and  the  industry  engaged  in  raising  and  transporting  the 
cotton,  and  what  we  receive  in  exchange  for  it,  must  be 
either  partially  or  wholly  thrown  out  of  employment.  Every 
one  must  see,  that  the  manufactures  of  England  could  be 
afforded  much  lower:  that  is,  would  be  able  much  better  to 
compete  with  those  of  other  nations,  if,  by  abolishing  her 
duties  on  corn,  her  manufactures  could  be  supplied  with  the 
necessaries  of  life  at  half  the  present  cost.  At  the  same 
profit  to  the  laborer  and  capitalist,  her  products  could  be 
afforded  at  a  price  less  than  at  present,  by  the  whole  amount 
of  the  difference  in  the*  expenses  of  living.  By  this  differ- 


PROTECTING    DUTIES.  131 


ence,  she  would  both  undersell  other  nations  and  increase 
the  demand  for  her  manufactures,  thus  reaping  at  once  a 
double  advantage. 

But  once  more:  It  is  seen  that,  by  such  a  system,  the 
course  of  industry  and  of  capital  in  a  nation,  must  be  greatly 
changed.  Thus,  when  an  article  is  imported,  one  class  of 
producers  must  labor  to  create  the  article  which  we  exchange 
for  it;  another  class  must  build  ships  to  transport  it;  and 
another  class  must  carry  on  the  transportation.  By  a  dis- 
criminating duty,  all  these  classes  must,  either  in  whole  or 
in  part,  be  thrown  out  of  employment,  and  this  capital  be 
either  reduced  in  value,  or  rendered  wholly  useless.  Now 
this  is  an  injury,  both  to  the  capitalist  and  the  laborer.  The 
property  of  the  one  and  the  skill  of  the  other  are  rendered 
useless,  and  by  so  much  is  it  a  total  loss  to  the  country.  It 
may  be  said,  let  them  seek  other  employments.  True;  they 
must  do  this ;  but  this  renders  it  not  the  less  true,  that  there 
has  been  so  much  loss.  If  a  man's  house  be  burned  down, 
it  is  easy  to  say  to  him,  move  into  another  house;  but  this 
does  not  alter  the  fact,  that  his  house  has  been  burned  down, 
and  that  he  has  suffered  loss  to  precisely  this  amount. 

But,  suppose  he  turn  to  the  other  employment.  It  has 
been  shown  that  the  average  of  profit,  in  this  employment, 
cannot  be  higher  than  the  average  of  profit  was,  in  the 
employment  which  he  left.  He  is  then  no  better  off  than  he 
was  before,  and,  in  the  meantime,  he  has  lost  the  skill  and 
capital  which  he  spent  many  years  to  acquire;  and  he  has 
lost  them,  not  as  in  the  case  mentioned,  by  the  progress  of 
civilization,  and  with  the  prospect  of  bettering  his  condition, 
but  by  an  act  of  arbitrary  legislation.  By  all  this  amount 
of  depreciation,  therefore,  is  he,  and  of  course  the  whole 
country,  poorer  by  the  exchange. 

Of  Bounties.  The  principle  of  bounties  is  the  same  as 
that  of  discriminating  duties.  The  manner  in  which  they 
are  bestowed,  is  the  following:  If  a  manufacturer  cannot 


132  PROTECTING   DUTIES. 

produce  cloth  for  less  than  ten  dollars  a  yard,  and  the 
imported  cloth  can  be  produced  at  five  dollars,  a  bounty  of 
five  dollars  a  yard  is  given  him,  for  every  yard  he  manufac- 
tures, or  for  every  yard  he  exports.  The  cloth,  then,  is  sold, 
either  at  home  or  abroad,  at  five  dollars,  and  he  also  receives 
five  dollars  as  a  gratuity. 

The  principal  reasons  urged   above,    apply   to   bounties. 
They  are,  however,  less  objectionable  for  several  reasons: 

1.  The  price  of  the  article  is  not  visibly  raised,  and  the 
consumption,    therefore,    on   this   account   is  not   so  much 
diminished. 

2.  The  encouragement  given,  in  this  manner,  is  cheaper; 
that  is,  we  pay  only  for  what  is  made,  while  by  discrimi- 
nating duties  we  pay  the  same  whether  any  thing  be  made 
or  not.     "We  pay   a  very  heavy   duty  on  cutlery   in   this 
country,  while  not  a  thousandth  part  of  the  cutlery  used  is 
made  here.     It  would  be  vastly  cheaper  to  pay  a  bounty 
sufficient  to  raise  all  the  cutlery  made  in  this  country  to  its 
present  prices,  and  it  would  be,  for  aught  I  see,  just  as  good 
for  the  cutler.     The  whole  effect  of  this  mode  of  encourage- 
ment is,  to  pay  one  man  as  much  more  as  the  bounty  amounts 
to,  for  producing  an  article,  than  we  should  pay  another 
man;  that  is,  one  man  will  do  it  for  five  dollars,  and  we 
engage  another  to  do  it  for  five  dollars,  and  give  him  five 
dollars  besides,  for  the  sake  of  economy. 


CHAPTER  VIII. 

FAILURE    OF    REVENUE    TARIFF    AND    OTHER 
SUBJECTS. 

BY  HENEY  C.  CAREY. 
A  letter  addressed  to  President  Grant. 


DEAR  SIR: — An  eminent  foreigner,  speaking  of    our 
countrymen,  characterized  them  as  "the  people  who 
soonest  forget  yesterday,"  and  that  nothing  could  be  more 
accurate  is  shown  by  the  facts  which  I  propose  now  to  give, 
as  follows: — 

The  revenue  tariff  period  which  followed  the  close,  in 
1815,  of  the  great  European  war,  was  one  of  great  distress 
both  private  and  public.  Severe  financial  crises  bankrupted 
banks,  merchants,  and  manufacturers;  greatly  contracted 
the  market  for  labor  and  all  its  products;  so  far  diminished 
the  money  value  of  property  as  to  place  the  debtor  every- 
where in  the  power  of  his  creditor;  caused  the  transfer  of 
a  very  large  portion  of  it  under  the  sheriff's  hammer;  and 
so  far  impaired  the  power  of  the  people  to  contribute  to  the 
revenue  that,  trivial  as  were  the  public  expenditures  of  that 
period,  loans  were  required  for  enabling  the  Treasury  to 
meet  the  demands  upon  it.  Under  the  protective  tariff  of 
1828  all  was  changed,  and  with  a  rapidity  so  great  that  but 
few  years  of  its  action  were  required  for  bringing  the 
country  up  to  a  state  of  prosperity  tho  like  of  which  had 
never  before  been  known,  here  or  elsewhere;  for  annihilating 
the  public  debt;  and  for  causing  our  people  wholly  to  forget 

(133) 


134          FAILURE  OF  REVENUE  TARIFF. 


the  state  of  almost  ruin  from  which  they  so  recently  had 
been  redeemed. 

Returning  once  again,  as  a  consequence  of  this  forgetful- 
ness,  to  the  revenue  tariff  system,  the  troubles  and  distresses 
of  the  previous  period  were  reproduced,  the  whole  eight 
years  of  its  existence  presenting  a  series  of  contractions  and 
expansions,  ending  in  a  state  of  weakness  so  extreme  that 
bankruptcy  was  almost  universal;  that  labor  was  everywhere 
seeking  in  vain  for  employment;  that  the  public  credit  was 
so  entirely  destroyed  that  the  closing  year  of  that  unfor- 
tunate period  exhibited  the  disgraceful  fact  of  commissioners, 
appointed  by  the  Treasury,  wandering  throughout  Europe 
and  knocking  at  the  door  of  all  its  principal  banking  houses 
without  obtaining  the  loan  of  even  a  single  dollar.  Public 
and  private  distress  now  compelling  a  return  to  the  protective 
system  we  find  almost  at  once  a  reproduction  of  the  prosper- 
ous days  of  the  period  from  1829  to  1835,  public  and  private 
credit  having  been  restored,  and  the  demand  for  labor  and  its 
products  having  becorno  greater  than  at  any  former  period. 

Once  again,  however,  do  we  find  our  people  forgetting  that 
to  the  protective  system  had  been  due  the  marvelous  changes 
that  were  then  being  witnessed,  and  again  returning  to  that 
revenue  tariff  system,  to  which  they  had  been  indebted  for 
the  scenes  of  ruin  which  had  marked  the  periods  from  1817 
to  1828,  and  from  1835  to  1842.  California  gold  now,  how- 
ever, came  in  aid  of  free  trade  theories,  and  for  a  brief 
period  our  people  really  believed  that  protection  was  a  dead 
issue  and  could  never  be  again  revived.  With  1854,  how- 
ever, that  delusion  passed  away,  the  years  that  followed,  like 
those  of  the  previous  revenue  tariff  periods,  having  been 
marked  by  enormous  expansions  and  contractions,  financial 
crises,  private  ruin,  and  such  destruction  of  the  national 
credit  that  with  the  close  of  Mr.  Buchanan's  administration 
we  find  the  Treasury  unable  to  obtain  the  trivial  amount 
which  was  then  required,  except  on  payment  of  most  enor- 
mous rates  of  interest. 


FAILURE   OF   REVENUE   TARIFF.  135 

( )nce  again  do  we  find  the  country  driven  to  protection, 
and  the  public  credit  by  its  means  so  well  established  as  to 
enable  the  treasury  with  little  difficulty  to  obtain  the  means 
of  carrying  on  a  war  whose  annual  cost  was  more  than  the 
total  public  expenditures  of  half  a  century,  including  the 
war  with  Great  Britain  of  1812.  Thrice  thus,  with  the 
tariffs  of  1828,  1842,  and  1860,  has  protection  redeemed  the 
country  from  almost  ruin.  Thrice  thus,  under  the  revenue 
tariffs  of  1817,  1835,  and  1846,  has  it  been  sunk  so  low  that 
none  could  be  found  "  so  poor  as  do  it  reverence."  Such 
having  been  our  experience  through  half  a  century  it  might 
have  been  supposed  that  the  question  would  be  regarded 
now  as  settled,  yet  do  we  find  among  us  men  in  office  and 
out  of  office,  secretaries  and  senators,  owners  of  ships  and 
railroads,  farmers  and  laborers,  denouncing  the  system  under 
which  at  every  period  of  its  existence,  and  most  especially 
in  that  of  the  recent  war,  they  had  so  largely  prospered — 
thereby  proving  how  accurate  has  been  the  description  of 
them  above  referred  to,  as  "the  people  who  soonest  forget 
yesterday." 

Such  being  the  case,  it  seems  to  me  that  it  might  be  well 
to  show  what  was  the  actual  state  of  affairs  throughout  the 
country  in  the  revenue  tariff  years  immediately  preceding 
the  war,  and  thereby  enable  railroad  owners  to  study  what 
had  been  the  effect  upon  their  interests  that  had  resulted 
from  the  cry  of  cheap  iron ;  ship  owners  to  see  that  the 
decay  of  their  interests  had  been  the  necessary  result  of  a 
system  under  which  internal  commerce  had  been  destroyed : 
laborers  to  see  why  it  had  been  that  labor  had  then  been  so 
superabundant  and  so  badly  paid;  farmers  to  see  why  it  had 
been  that  their  farms  had  then  been  so  deeply  mortgaged; 
secretaries  to  see  why  it  had  been  that  the  public  credit  had 
then  been  so  nearly  annihilated ;  and  all  to  see  why  it  had 
been  that  the  pro  slavery  power  had  so  largely  grown  as 
to  have  warranted  the  South  in  venturing  on  the  late 


13G          FAILURE  OF  REVENUE  TARIFF. 

rebellion.  To  that  end,  I  shall  now  present  two  letters 
written  in  1858,  and  addressed  to  our  then  president,  Mr. 
Buchanan,  respectfully  asking  you  to  remark  the  predictions 
that  further  continuance  in  the  same  direction  must  result  in 
financial  and  political  ruin,  and  in  our  being  driven  from  the 
ocean,  all  of  which  we  now  see  to  have  been  so  fully  realized.* 

"  Civilized  communities — those  communities,  Mr.  Presi- 
dent, which  have  obtained  that  freedom  of  domestic  inter- 
course which,  as  you  have  seen,  we  so  sorely  need — follow 
the  advice  of  Adam  Smith,  in  exporting  their  wool,  and 
their  corn,  in  the  form  of  cloth,  at  little  cost  for  transporta- 
tion. Thus,  France,  in  1856,  exported  silks  and  cloths, 
clothing,  paper,  and  articles  of  furniture,  to  the  extent  of 
$300,000,000;  and  yet  the  total  weight  was  short  of  FIFTY 
THOUSAND  TONS — requiring  for  its  transport  but  forty  ships 
of  moderate  size,  and  the  services  of  perhaps  2,000  persons. 

"  Barbarous,  and  semi-barbarous  countries,  on  the  con- 
trary, export  their  commodities  in  their  rudest  state,  at 
heavy  cost  for  transportation.  India  sends  the  constituents 
of  cloth — cotton,  rice,  and  indigo — to  exchange,  in  distant 
markets,  for  the  cloth  itself.  Brazil  sends  raw  sugar  across 
the  ocean,  to  exchange  for  that  which  has  been  refined.  We 
send  wheat  and  Indian  corn,  pork  and  flour,  cotton  and  rice, 
fish,  lumber,  and  naval  stores,  to  be  exchanged  for  knives 
and  forks,  silks  and  cottons,  paper  and  China-ware.  The 
total  value  of  these  commodities  exported  in  1856 — high  as 
were  then  the  prices — was  only  $230,000,000;  and  yet,  the 
American  .and  foreign  ships  engaged  in  the  work  of  trans- 
port were  of  the  capacity  of  six  MILLIONS,  EIGHT  HUNDRED 
AND  TWENTY-TWO  THOUSAND  TONS, — requiring  for  their  man- 
agement no  less  than  269,000  persons. f 

*  These  letters  form  part  of  a  series  entitled  "  Letters  to  the  President  of  the 
United  States  on  the  Foreign  and  Domestic  Policy  of  the  Union  and  its  Effects  as 
exhibited  in  the  Condition  of  the  People  and  the  State.1'  Phila.,  1858. 

tThis  is  the  total  tonnage  that  arrived  from  foreign  countries,  in  that  year.  A 
small  portion  was  required  for  the  exportation  of  manufactured  commodities,  but 
it  was  so  small  as  scarcely  to  require  notice. 


FAILURE    OF   REVENUE   TARIFF.  137 

11  In  the  movement  of  all  this  property,  Mr.  President, 
there  is  great  expense  for  transportation.  Who  pays  it  ? 
Ask  the  farmer  of  Iowa,  and  he  will  tell  you,  that  he  sells 
for  15  cents — and  that,  too,  payable  in  the  most  worthless 
kind  of  paper — a  bushel  of  corn  that,  when  received  in 
Manchester,  commands  a  dollar;  and  that  he,  in  this  man- 
ner, gives  to  the  support  of  railroads  and  canals,  ships  and 
sailors,  brokers  and  traders,  no  less  than  eighty- five  per  cent. 
of  the  intrinsic  value  of  his  products.  Ask  him  once  again, 
and  he  will  tell  you  that  while  his  bushel  of  corn  will  com- 
mand, in  Manchester,  18  or  20  yards  of  cotton  cloth,  he  is 
obliged  to  content  himself  with  little  more  than  a  single 
yard— eighty- five  per  cent,  of  the  clothing  power  of  his  corn 
.having  been  taken,  on  the  road,  as  his  contribution  towards 
the  tax  imposed  upon  the  country,  for  the  maintenance  of  the 
machinery  of  that  <  free  trade '  which,  as  you,  Mr.  President, 
have  so  clearly  seen,  is  the  sort  of  freedom  we  do  not,  at 
present,  need.* 

"  The  country  that  exports  the  commodity  of  smallest 
bulk,  is  almost  wholly  freed  from  the  exhausting  tax  of 
transportation.  At  Havre — ships  being  little  needed  for  the 
outward  voyage,  while  ships  abound — the  outward  freights 
must  be  always  very  low. 

"The  community  that  exports  the  commodities  of  greatest 
bulk,  must  pay  nearly  all  the  cost  of  transportation.  A 
score  of  ships  being  required  to  carry  from  our  ports  the 
lumber,  wheat,  or  naval  stores,  the  tobacco,  or  the  cotton, 
required  to  pay  for  a  single  cargo  of  cloth,  the  outward 
freights  must  always  be  at,  or  near,  that  point  which  is  re- 
quired to  pay  for  the  double  voyage;  and  every  planter 
knows,  to  his  cost,  how  much  the  price  of  his  cotton  is 
dependent  upon  the  rate  of  freight. 

*"  Thirty-one  independent  States  enjoying  a  thousand  advantages  and  carry- 
ing on  a  mutual  free  trade  with  each  other.  That  is  the  'free  trade'  that  we 
really  want."— BUCHANAN. 


138          FAILURE  OP  REVENUE  TARIFF. 

"  In  the  first  of  these,  Mr.  President,  employments  be- 
come from  clay  to  day  more  thoroughly  diversified;  the 
various  human  faculties  become  more  and  more  developed ; 
the  power  of  combination  tends  steadily  to  increase;  agri- 
culture becomes  more  and  more  a  science;  the  land  becomes 
more  productive;  the  societary  movement  becomes  more 
stable  and  regular;  and  the  power  to  purchase  machinery  of 
every  kind,  whether  ships,  mills,  or  the  precious  metals, 
tends  steadily  to  augment. 

"In  the  last,  the  reverse  of  this  is  found,  the  pursuits  of 
men  becoming  less  diversified;  the  demand  for  human  fac- 
ulty becoming  more  and  more  limited  to  that  for  mere  brute 
force,  or  for  the  craft  by  which  the  savage  is  so  much  dis- 
tinguished; the  power  of  association  tending  to  decline; 
agriculture  becoming  less  and  less  a  science,  and  the  land 
becoming  more  and  more  exhausted;  the  societary  move- 
ment acquiring,  more  and  more,  the  fitfulness  and  irregular- 
ity of  movement  you  have  so  well  described  as  existing 
among  ourselves;  and  the  power  to  obtain  machinery  of  any 
kind  tending  steadily  to  diminish. 

"The  first  of  these,  Mr.  President,  may  be  found  in  the 
countries  of  Central  and  Northern  Europe — those  which 
follow  in  the  lead  of  Colbert  and  of  France.  All  of  these 
are  gradually  emancipating  themselves  from  the  most  op- 
pressive of  all  taxes,  the  tax  of  transportation.  All  of 
them,  therefore,  are  moving  in  the  direction  of  growing 
wealth  and  power,  with  correspondent  advance  in  civiliza- 
tion and  in  freedom. 

"  The  last  may  be  found  in  Ireland,  India,  Jamaica,  Por- 
tugal, Turkey,  and  these  United  States — the  countries  which 
follow  in  the  lead  of  England.  All  of  these  are  becoming 
more  and  more  subjected  to  the  tax  of  transportation.  All 
of  them,  therefore,  are  declining  in  wealth  and  power,  in 
civilization,  and  in  freedom. 

"In  the  first  the  land  yields  more  and  more  with  each 


FAILURE   OF   REVENUE   TARIFF.  189 

successive  year — with  constant  increase  in  the  power  of  a 
bushel  of  wheat,  or  a  pound  of  wool,  to  purchase  money. 
In  the  last  the  land  yields  less  from  year  to  year,  with  con- 
stant tendency  to  decline  in  the  price  of  food  and  cotton. 
The  first  import  the  precious  metals.  The  last  export  them. 
The  first  find  daily  increase  of  power  to  maintain  a  specie 
circulation  as  the  basis  of  the  higher  and  better  currency 
supplied  by  banks.  The  last  are  gradually  losing  the  power 
to  command  a  circulation  of  any  kind,  and  tending  more  and 
more  towards  that  barbaric  system  of  commerce  which  con- 
sists in  exchanging  labor  against  food,  or  wool  and  corn 
against  cloth. 

"  We  may  be  told,  however,  Mr.  President,  that  in  return 
for  the  eighty-five  per  cent,  of  his  products  that,  as  we  see, 
is  paid  by  the  farmer  of  Iowa,  and  by  the  Texan  planter,  we 
are  obtaining  a  magnificent  system  of  railroads — that  our 
mercantile  marine  is  rapidly  increasing — that,  by  its  means, 
we  are  to  secure  the  command  of  the  commerce  of  the  world, 
etc.,  etc.  How  far  all  this  is  so,  we  may  now  inquire.  To 
me  it  certainly  appears  that  if  this  be  really  the  road  to 
wealth  and  power  it  would  be  well  to  require  the  exporta- 
tion of  wheat  instead  of  flour,  paddy  in  place  of  rice,  cotton 
in  the  seed,  corn  in  the  ear,  and  lumber  in  the  shape  of  logs, 
rather  than  in  that  of  furniture. 

"Looking  first  to  our  internal  commerce,  we  find  a  mass 
of  roads,  most  of  which  have  been  constructed  by  help  of 
bonds  bearing  interest  at  the  rate  of  6,  8,  or  10  per  cent. — 
bonds  that  have  been  disposed  of  in  the  market  at  60,  70,  or 
80  per  cent,  of  their  nominal  value,  and  could  not  now,  proba- 
bly, be  resold  at  more  than  half  the  price  at  which  they 
originally  had  been  bought.  Half  made,  and  little  likely 
ever  to  be  completed,  these  roads  are  worked  at  great 
expense,  while  requiring  constant  and  great  repairs.  As  a 
consequence  of  this  it  is  that  the  original  proprietors  have 
almost  wholly  disappeared,  the  stock  being  of  little  worth. 


140  FAILURE  OF  REVENUE  TARIFF. 

The  total  amount  applied  to  the  creation  of  railroads  having 
been  about  $1,000,000,000,  and  the  average  present  money 
value  scarcely  exceeding  40,  if  even  30,  per  cent.,  it  follows 
that  $600,000,000  have  been  sunk,  and  with  them  all  power 
to  make  new  roads.  Never,  at  any  period  of  our  history, 
have  we  been,  in  this  respect,  so  utterly  helpless  as  at  present. 
Nevertheless,  the  policy  of  the  central  government  looks 
steadily  to  the  dispersion  of  our  people,  to  the  occupation  of 
new  territories,  to  the  creation  of  new  States,  and  to  the  pro- 
duction of  a  necessity  for  further  roads.  That,  Mr.  Presi- 
dent, is  the  road  to  physical  and  moral  decline,  and  political 
death,  as  will  soon  be  proved,  unless  we  change  our  course. 

"  The  railroad  interest  being  in  a  state  of  utter  ruin,  we 
may  now  turn  to  the  shipping  one,  with  a  view  to  see  how 
far  we  are  likely,  by  its  aid,  to  obtain  that  command  of  the 
commerce  of  the  world  so  surely  promised  to  us  by  the 
author  of  the  tariff  of  '46.  Should  that  prove  to  be  moving 
in  the  same  direction,  the  fact  will  qertainly  aiford  new  and 
stronger  proof  of  the  perfect  accuracy  of  your  own  views, 
Mr.  President,  as  to  the  sort  of  freedom  we  so  much  require. 

"In  a  state  of  barbarism,  person  and  property  being 
insecure,  the  rate  of  insurance  is  high.  Passing  thence 
towards  civilization,  security  increases,  and  the  rate  of 
insurance  declines,  as  we  see  it  to  be  so  rapidly  doing,  in 
reference  to  fire,  in  all  the  advancing  countries  of  Europe. 
Our  course,  in  reference  to  shipping,  being  in  the  opposite 
direction — security  diminishing,  when  it  should  increase — 
the  rate  of  insurance  steadily  advances,  as  here  is  shown  : 

Sates  of  Insurance  upon  American  Ships. 

1846.  1858. 

To  Cuba,  .           .           .           .    IK  per  cent.        .  .  .    1>£  to  2  per  cent. 
"  Liverpool,       .           .           .    1&        "  .           .  .    \%  to  2 
"  India  and  China,       .           .    1%        "  .           .  .    2J£    .  " 
To  and  from  Liverpool,  on  pack- 
et-ships, annual  rates,     .5  ...    8 

"  To  what  causes,  Mr.  President,  are  we  to  attribute  this 
extraordinary  change  ?  May  it  not  be  found  in  the  fact,  that 


FAILURE    OF   REVENUE   TARIFF.  141 

the  more  we  abandon  domestic  commerce,  and  the  larger  the 
amount  of  taxation  imposed  upon  our  farmers  for  the  main- 
tenance of  transporters,  the  greater  becomes  the  recklessness 
of  those  who  gain  their  living  out  of  that  taxation  ?  Look 
back  to  the  last  free-trade  period — that  from  1837  to  1841 — 
and  you  will  find  phenomena  corresponding  precisely  with 
those  which  are  now  exhibited,  -although  not  so  great  in 
magnitude.  At  present,  the  utter  recklessness — the  total 
absence  of  conscientious  feeling— here  exhibited,  is  such  as 
to  astonish  the  thinking  men  of  Europe.  Railroad  accidents 
have  become  so  numerous  as  scarcely  to  attract  even  the 
momentary  attention  of  the  reader,  and  the  loss  of  life 
becomes  greater  from  year  to  year.  Steamers  are  exposed 
to  the  storms  of  the  lakes  that  are  scarcely  fit  to  navigate 
our  rivers.  Ships  that  are  unfit  for  carrying  insurable  mer- 
chandise, are  employed  in  the  carriage  of  unfortunate  passen- 
gers, they  being  the  only  commodity  for  whose  safe  delivery 
the  ship-owner  cannot  be  made  responsible.  Week  after 
week  the  records  of  our  own  and  foreign  courts  furnish  new 
evidence  of  decline  in  the  feeling  of  responsibility  which, 
thirty  years  since,  characterized  the  owners  of  American 
ships,  and  the  men  therein  employed. 

"  Look  where  we  may,  Mr.  President,  on  the  sea  or  on 
the  land,  evidences  of  demoralization  must  meet  our  view. 
1  Stores  and  dwellings '  — and  here  I  give  the  words  of  a 
New  York  journal — '  are  constructed  of  such  wretched 
materials  as  scarcely  to  be  able  to  sustain  their  own  weight, 
and  with  apologies  for  walls  which  tumble  to  the  ground, 
after  being  exposed  to  a  rain  of  a  few  hours'  duration,  or  to 
a  wind  which  possesses  sufficient  force  to  set  the  dust  of  the 
highways  in  motion.  Entire  blocks  of  edifices  are  put  up, 
with  the  joists  of  all  so  connected  with  each  other,  as  to 
form  a  complete  train  for  the  speedy  communication  of  fire 
from  one  to  another.  Joists  are  built  into  flues,  so  that  the 
ends  are  exposed  to  becoming  first  heated,  and  then  ignited 
by  a  flying  spark.  Rows  of  dwellings  and  warehouses  are 


142          FAILURE  OF  REVENUE  TARIFF. 

frequently  covered  with  a  single  roof,  which  has  not,  in  its 
whole  extent  of  combustible  material,  a  parapet  wall,  or 
other  contrivance,  to  prevent  the  spread  of  the  flames  in  the 
event  of  a  conflagration.' 

"The  feeling  of  responsibility,  Mr.  President,  grows  with 
the  growth  of  real  civilization.  It  declines  with  the  growth 
of  that  mock  civilization,  but  real  barbarism,  which  has  its 
origin  in  the  growing  necessity  for  ships,  wagons,  and  other 
machinery  of  transportation.  The  policy  of  the  central 
government  tends  steadily  towards  its  augmentation,  and 
hence  it  is  that  American  shipping  so  steadily  declines  in 
character,  and  in  the  proportions  which  it  bears  to  that  of 
the  foreigners  with  whom  we  are  required  to  place  ourselves 
in  competition. 

"Two  years  since,  we  were  told,  that  our  shipping  already 
exceeded  5,000,000  tons  ;  that  we  had  become  the  great 
maritime  power  of  the  world  ;  and,  of  course,  that  this 
great  fact  was  to  be  received  as  evidence  of  growing  wealth 
and  power.  Last  year,  however,  exhibited  it  as  standing  at 
only  4,871,000  tons,  and  future  years  are  likely  to  show 
a  large  decrease — ships  having  become  most  unprofitable. 
More  than  four-fifths  of  the  products  of  Western  farms  and 
Southwestern  plantations,  are,  as  we  have  seen,  taken  for 
the  support  of  railroads  and  ships  ;  and  yet,  the  roads  are 
bankrupt,  while  the  ships  have  done  little  more,  for  some 
years  past,  than  ruin  the  men  who  owned  them.  Such  being 
the  case,  it  seems  little  likely,  that  it  is  by  means  of  sailing 
ships  we  are  to  acquire  that  control  of  the  commerce  of  the 
world,  so  confidently  promised  when,  in  1846,  we  were  led 
to  abandon  the  policy  which  looked  to  the  creation  of  a 
domestic  commerce  as  the  true  foundation  of  a  great  foreign 
one.  What  are  the  prospects  in  regard  to  that  higher 
description  of  navigation  which  invokes  the  aid  of  steam, 
will  be  shown  in  another  letter. 

Yours  very  truly,          HENRY  C.  CAREY." 

GEN.  U.  S.  GRANT. 
PHILADELPHIA,  December  10,  1868. 


CHAPTER  IX. 

THE  FALLACIES  OF  THE  PROTECTIVE  THEORY. 

BY  HON.  AMASA  WALKER,  LL.D. 
Late  lecturer  in  Amherst  College. 


~T1T~7~E  leave  now  the  illustrations  of  the  principles  of 
VV  protection,  as  exhibited  in  the  manufacture  of  iron. 
We  believe  we  have  shown  the  unsoundness  of  all  that 
political  philosophy  which  proposes  to  substitute  artificial  for 
natural  laws,  in  production.  But  there  still  remains  some 
popular  arguments,  which  we  will  notice. 

//  1.  It  is  claimed  as  good  policy  to  protect  "an  infant 
manufacture  "  until  it  is  well  established,  because  it  will  then 
take  care  of  itself,  and  ultimately  confer  great  wealth  on 
the  country.  Of  this  it  may  be  said  : — 

(a)  There  is  no  assurance,  under  a  system  which  removes 
the  sole  test  of  usefulness  and  self-support  from  the  produc- 
tion of  a  people,  that  enterprises  will  not  spring  up  which 
never  will  come  to  maturity,  which  have  no  vital  force  of 
themselves,  which  exist  solely  by  reason  of  the  protection, 
and  will  never  become  remunerative.  If  good  enterprises, 
why  not  bad,  since  the  test  of  bad  or  good  has  been  with- 
drawn ?  In  such  a  rankness  of  unnatural  growth,  it  is  far 
more  likely  that  weeds  will  be  produced  than  useful  plants. 
Thus  the  whole  industry  of  a  country  may  become  perverted 
and  falsified  by  removing  the  principle  of  competition. 
There  will  be  no  reason  for  healthful  industries  to  spring  up, 

(143) 


144  FALLACIES   OF   THE   PROTECTIVE   THEORY. 

which  will  not  also  give  life  to  such  as  are  weak,  tardy, 
ephemeral;  to  such  as  are  parasitic  and  exhausting. 

(ft)  Other  things  aside,  the  desirableness  of  raising  the 
" infant"  will  depend  very  much  on  the  length  of  time  and 
total  cost  required  to  bring  it  to  full  age  and  size.  There 
"liave  been  nations  that  exposed  sickly  and  unpromising  chil- 
dren, holding  it  to  be  for  the  advantage  of  the  state  to  rear 
none  but  such  as  promised  to  become  vigorous  and  useful 
members  of  society.  Eeligion  and  humanity  have  changed 
this,  out  of  respect  for  the  image  of  God  found  in  every 
human  creature;  and  now  the  cripple  and  the  idiot  are 
reared  tenderly  and  patiently.  But  the  protective  policy 
extends  the  same  kindness  and  forbearance  to  industry.  No 
matter  how  plainly  palsy,  scrofula,  or  fatuity  may  appear  in 
the  form  or  features,  the  infant  is  sure  of  an  affectionate 
solicitude,  that  only  changes  to  become  more  anxious  as  the 
infant  gets  punier  and  weaker. 

France  protected  one  of  these  industrial  infants;  i.  e.  the 
beet-sugar  culture.  Dr.  Way  land  said  of  it,  in  1837,  "  The 
present  protection  costs  one  million  and  four  hundred  thou- 
sand pounds  per  annum.  Suppose  this  to  continue  for 
twenty  years,  it  will  amount  to  no  less  than  twenty-eight 
million  pounds  sterling  ;  the  interest  of  which,  at  five  per 
cent.,  will  bring,  at  two  and  a  half  pence  per  pound,  one 
hundred  and  twenty-six  million  pounds  of  sugar,  or  nearly 
the  whole  annual  amount  of  sugar  now  consumed  in  France." 
In  1865,  we  can  say  that  this  child,  born  in  the  early  part 
of  the  great  Napoleon's  career,  has  not  yet  become  strong 
enough  to  walk  alone,  or  hardy  enough  to  take  the  air. 
Supposing  an  equable  annual  consumption  of  any  article,  it 
requires  but  common  school  arithmetic  to  show  that  a  protec- 
tion to  the  extent  of  fifty  per  cent.,  continuing  for  eighteen 
years,  would  amount  to  a  sum,  which,  at  six  per  cent,  inter- 
est, would  furnish  the  nation  in  that  article  to  the  end  of 
time,  without  ever  paying  anything  more  for  it.  A  child 


FALLACIES  OP  THE  PROTECTIVE  THEORY.     145 

that  is  so  costly  to  bring  up  ought  to  make  a  very  useful 
man;  whereas  it  is  generally  true  that  such  children  have 
to  be  brought  up  three  or  four  times  over,  and  then  live  on 
the  poor-rates.  If  such  a  protection,  however,  were  to  be 
continued  only  eighteen  years,  and  the  necessity  for  it  then 
cease,  the  industry  having  become  self-supporting,  it  would 
yet  be  true  that  every  pound  would  have  two  prices,  added 
to  each  other:  one,  the  present  cost  of  making  ;  the  other, 
interest  on  old  protection  equal  to  the  present  cost. 

In  fact,  iron  and  sugar  have  been  protected  in  this  country 
since  1816,  and  the  duties  still  continue.  And  all  for  what? 
Where  is  the  advantage  of  making  a  great  annual  sacrifice, 
for  a  long  time,  to  establish  an  industry  that  will  grow  up  of 
itself  as  soon  as  it  will  pay,  as  was  growing  up  slowly,  but 
successfully,  before  there  was  any  protection? 

(c)  Finally,  no  sound  and  healthful  manufacture  needs 
protection  at  all.  The  phrase  "infancy"  is  entirely  soph- 
istical, as  applied  to  any  branch  of  legitimate  industry. 
Each  one  comes  full-grown  and  full-armed  into  life.  We 
do  not  mean  that  it  has  no  growth,  as  far  as  extension  is 
concerned.  It  certainly  does  go  on  from  town  to  town,  from 
State  to  State,  out  of  small  beginnings.  But  there  is  no 
infancy,  so  far  as  completeness  or  robustness  of  life  is  con- 
jcerned.  Suppose,  for  example,  that  there  was  but  one  manu- 
facturer of  iron  in  the  country,  and  he  produced  only  to  the 
amount  of  five  thousand  dollars  a  year.  Yet,  if  he  could 
bring  to  the  market  as  good  and  cheap  an  article  as.  the 
foreigner,  he  would  be  none  the  worse  for  being  a  solitary 
producer  on  some  mountain  in  Pennsylvania.  The  security 
of  any  manufacture  does  not  reside  in  the  number  of  those 
engaged,  but  in  its  power  to  meet  the  public  wants.  How- 
ever few  may  be  employed,  however  humble  their  beginnings, 
they  stand  simply  in  their  ability  to  sell  a  good  article  at  a 
reasonable  price,  and  are  as  strong  in  this  as  ever  was  the 
proudest  guild  of  London. 
7 


146     FALLACIES  OF  THE  PROTECTIVE  THEORY. 

Of  course,  there  is  a  period  in  every  enterprise  when  all 
is  experiment  and  outlay.  But  capital  is  always  ready  and 
able  to  meet  the  necessity.  It  belongs  to  capital  to  do  this; 
for  it  gets  the  remuneration  of  it  when  the  yield  begins. 

There  is  a  remarkable  confirmation  of  the  truth  of  these 
remarks  in  the  history  of  the  boot  and  shoe  manufactures  of 
the  United  States.  They  never  asked  for  protection ;  never 
received  any  notice  in  all  the  conflicts  for  increased  tariffs. 
The  trade  grew  up  naturally,  steadily,  and  profitably  from 
the  first;  increasing  gradually  with  the  growth  of  the  coun- 
try, until,  at  the  present  time  it  is  not  only  the  largest,  but 
one  of  the  most  profitable  branches  of  manufacturing  indus- 
try. In  Massachusetts  alone,  this  manufacture  extends  to 
over  fifty  millions  of  dollars  annually,  and  is  by  far  the  most 
advantageous  branch  of  industry  in  the  State. 

There  is  another  popular  argument  for  protection. 

/2d.     It  is  claimed  that  we  ought  to  protect  our  labor 
igainst  the  pauper  kbor  of  Europe. 
Does   a   restrictive  tariff  do  this?     Does   it   prevent   the 
laborers  of  Europe  from  entering  into  competition  with  ours? 
Does  it  not,  in  fact,  bring  them  to  our  very  doors? 

For  fifty  years  prior  to  the  date  of  the  first  important  tar- 
iff, viz.:  1816,  there  was  no  immigration  of  any  consequence. 
Soon  after  this,  we  began  to  attract  skilled  workmen.  Some 
were  expressly  hired  to  come  over  to  teach  us  how  to  spin, 
weave,  etc.  As  we  raised  the  tariff  and  increased  manu- 
factures, the  current  increased,  until  it  has  inundated  the 

try.     All  Europe  pours  in  its  starved  labor  upon  us. 
What  kind  of  labor  naturally  emigrates?     The  poorest, 
because  the  better  by  character  and   capacity  can  protect 
itself  longer  at  home.     An  employer  does  not  turn  his  good 
men  off  first. 

Why  so  large  a  proportion  of  Irish?  Because  theirs  is 
the  cheapest  labor  ;//fche  first  thrown  out  in  any  reduction. 
The  tide,  once  turned  upon  us,  kept  swelling,  till  our  nation- 


FALLACIES   OF   THE   PROTECTIVE   THEORY.  147 

ality  is  almost  in  dispute.  This  immense  immigration  never 
came  here  in  obedience  to  natural  laws,  but  to  the  legislation 
of  Congress.  Instead  of  protecting  American  labor  against 
the  pauper  labor  of  Europe,  we  have  brought  that  labor  here 
to  meet  the  American  citizen  face  to  face,  on  a  perfect  level, 
with  equal  civil  rights,  and  have  given  to  him  the  advantage 
of  our  immense  landed  capital.  Whether  this  is  good  State 
policy;  whether  a  forced  immigration,  in  such  vast  numbers 
as  to  prevent  an  easy  and  natural  assimilation  with  the 
native  population,  is  desirable  or  not, — it  is  not  our  province 
to  discuss.  That  is  a  political  question.  It  only  belongs  to 
us  to  show  that  no  protection  has  been  given  to  American 
labor. 

/  3d.     It  has  been  gravely  said,  that  the  general  average  of 
/all  profits  is  raised  by  a  protective  policy. 

If  true,  this  is  a  valuable  discovery.  It  affords  the  easiest 
known  method  of  making  everybody  rich  at  once,  and  with- 
out effort.  Government  has  only  to  place  sufficient  restric- 
tions on  trade  to  carry  up  profits  to  one  hundred  per  cent. ; 
and,  when  all  trade  has  ceased,  everybody's  profits  will  be 
immense! 

The  folly  of  such  assertions  is  too  apparent  to  justify  any 
considerable  notice. 

Where  are  the  enhanced  profits  to  come  from?  Out  of 
the  diminished  production  ?  Is  the  whole  lessened,  and 
every  part  increased  ?  So  far  as  protection  creates  a 
monopoly  at  the  expense  of  the  public,  it  may,  for  a  while, 
add  to  the  profits  of  an  individual  or  a  class,  but  only  by 
taxing  other  industries  for  the  purpose. 

/  4th.  But  it  is  urged,  leaving  mere  argument,  do  we  not 
know  that  protection  especially  develops  manufactures?  and 
are  not  manufacturing  countries  found  to  be,  in  fact,  richer 
than  those  which  are  more  exclusively  agricultural  ?  Both 
propositions  are  true  in  an  isolated  form. 

Other  things  equal,  in  a  normal  state  of  things,  manufac- 


148     FALLACIES  OF  THE  PROTECTIVE  THEORY. 

taring  communities  are  older  than  agricultural,  and,  of 
course,  have  much  greater  accumulated  wealth.  England 
is  older  and  richer  than  the  United  States;  Massachusetts 
than  Ohio.  Manufactures  arise  because  a  people  have  a 
dense  population,  abundant  capital,  and  great  industrial 
activity.  Under  such  circumstances  great  wealth  will  be 
created,  because  these  are  the  fit  conditions  of  creating 
wealth.  Such  creations  are  natural. 

"It  is,  without  question,  true,  that  in  an  equal  manufac 
turing  population  will  be  found  a  greater  accumulation  of 
wealth.  One  important  reason  of  this  is,  that  a  larger  share 
of  the  population  are  engaged  in  production,  and  a  larger 
amount  of  capital  is  employed.  "Women  and  children,  who 
could  earn  but  little  in  agricultural  labors,  can  earn  much  in 
manufacturing.  This  is  one  of  the  most  striking  results  of 
a  division  of  labor,  as  we  have  already  shown.  As  we  carry 
on  agriculture,  women  and  children  do  little,  though  in  Con- 
tinental Europe  they  do  much.  Agriculture,  too,  can  be 
performed  only  in  certain  portions  of  the  year.  Manufac- 
turing need  never  stop,  summer  or  winter,  cold  or  hot,  fair 
or  foul.  This  makes  a  wonderful  difference. 

All  these,  however,  are  economical  advantages,  which 
manufacturing  communities  have,  when  properly  constituted 
and  employed.  These  are  reasons  which  may  induce  such 
industry;  never  reasons  why  it  should  be  compelled.  If, 
with  so  great  a  superiority,  manufactures  do  not  arise  freely 
and  support  themselves  fully,  it  becomes  a  double  argument 
for  not  forcing  them.  If  such  advantage  will  not  secure 
free  manufacturing,  it  is  certain  that  compulsory  manufac- 
turing will  not  secure  these  advantages,  without  the  sacrifice 
of  other  interests. 

But  all  this  argument  in  favor  of  manufactures,  and  these 
anticipations  of  agricultural  glut,  come  out  of  a  false  idea  of 
what  are  the  natural  relations  of  these  two  great  branches 
of  labor.  Granted,  that  manufactures  are  a  desirable  form 


FALLACIES    OF   THE   PROTECTIVE   THEORY.  149 

of  national  industry,  give  a  good  market  for  the  produce  of 
the  farm  and  the  mine,  and  help  build  up  the  common 
wealth;  yet  it  is  not  necessary  to  bring  them  on  by  a  forcing 
process,  for  they  come  of  themselves  as  soon  as  profitable. 
We  have  already  shown  that  certain  large  classes  of  manu- 
factured products  receive  such  a  natural  or  local  protection 
as  insures  their  home  growth.  But  there  are  other  classes 
which  have  an  encouragement  even  more  liberal.  There  is 
a  principle  always  operating  to  bring  manufactures  out,  on 
every  part  of  the  earth's  surface.  It  is  the  impossibility  of 
carrying  on  certain  branches  anywhere  but  at  the  place 
where  the  article  is  wanted.  The  survey,  grading,  and  con- 
struction of  railroads  and  canals,  forming  as  they  do  an 
immense  portion  of  the  public  industry,  cannot  be  brought 
within  the  purview  of  the  custom  house.  They  are  neces- 
sarily confined  to  the  field  in  which  these  means  of  trans- 
port are  to  be  used.  These  may  stand  as  examples  of  a 
vast  class  of  industry,  which  arises  indifferently  to  protec- 
tion. So  all  tinkering,  patching,  and  repairing,  great  or 
small,  must  be  done  on  the  spot.  A  glance  at  any  village, 
no  matter  how  intimate  its  connection  with  some  center  of 
trade,  will  show  how  large  a  share  of  its  labor,  other  than 
agricultural,  is  employed  in  its  local  work;  so  that,  one  way 
and  another,  these  classes  of  manufacturing  interests,  which 
inevitably  come  to  the  community  without  help  of  law,  form 
a  very  considerable  part  of  the  whole. 

The  value  of  manufactured  articles  imported,  for  the  four 
years  preceding  the  war  of  the  Rebellion,  ranged  from  one 
hundred  and  fifty  to  two  hundred  millions  a  year;  while  the 
authorities  of  the  Treasury  and  of  the  census  estimate  the 
value  of  home  manufactures  at  not  less  than  one  thousand 
millions  a  year,  for  the  same  period.  Such  comparisons  are 
necessarily  crude;  but  it  would  be  far  within  bounds  to  say 
that  four-fifths  of  all  the  present  consumption  of  manufac- 
tures would  be  supplied  by  our  national  industry,  irrespec- 


150  FALLACIES   OF   THE    PROTECTIVE   THEORY. 

tive  of  protection.  All  the  matter,  then,  comes  to  this: 
Shall  we  impose  heavy  duties  to  force  labor  and  capital  into 
such  channels  as  shall  provide,  at  great  expense,  the  remain- 
ing fifth  of  the  manufactures  we  consume? 

5th.  Perhaps  the  most  popular  plea  of  all  for  protection 
looks  to  "the  development  of  our  natural  resources."  This 
does  not  propose  to  increase  the  gross  or  net  product  of 
national  industry,  does  not  assume  or  assert  that  the  labor 
and  capital  of  the  country  are  not  well  employed  at  present; 
but  it  remembers  the  great  mineral  and  metallic  wealth  we 
have  yet  hidden  in  the  Middle  States  and  the  West,  and  it 
sighs  for  the  thought  of  their  usefulness.  It  regards  as 
of  no  consequence  the  fact  that  digging  or  working  the 
ores  will  not  pa|.  It  can  only  exclaim,  "  What  a  pity  that 
such  great  adwntage  should  be  unimproved!  "  These 
reasoners  would  call  labor  off  from  the  rich  fields  of  agri- 
culture, from  no  other  motive  than  a  desire  to  see  our 
wonderful  mineral  treasures  developed. 

The  answer  to  this  species  of  patriotism  may  be  very 
short.  Since  Nature  has  taken  thousands  of  years  to  form 
these  ores  and  store  these  mines,  man  can  at  least  take 
time  enough  to  wait  till  it  will  pay  to  dig  them.  It  may 
seem  to  some  a  pity  they  should  remain  underground;  but 
the  true  cause  of  the  misfortune  resides  in  the  fact  that  we 
have  not  population  enough  to  settle  densely  one-tenth  of 
our  territory.  It  is  a  misfortune  that  will  cure  itself  as  our 
numbers  increase.  We  can  certainly  afford  to  leave  for 
future  generations  what  we  cannot  afford  to  take  for  our- 
.selves. 

We  have  said  that  legal  protection  may  be  imposed  from 
one  or  more  of  four  general  reasons. 

We  have  discussed  the  first  two,  viz. : 

To  raise  a  revenue. 

To  encourage  the  growth  of  certain  commodities  at  home. 

We  now  come  to  the  remaining  reasons,  which  will  de- 


FALLACIES  OF  THE  PROTECTIVE  THEORY.     151 

mand  hut  little  attention,  as  their  principles  have  already 
been  developed. 

To  support  existing  manufactures. 

Here  we  leave  the  expediency  of  founding  special  indus- 
tries by  a  system  of  protection,  and  confine  ourselves  to  the 
question,  whether,  such  industries  having  been  begun  and 
developed  under  high  tariffs,  capital  having  become  so  en- 
gaged, labor  having  become  so  employed,  it  is  not  necessary 
to  continue  the  protection 

So  far  as  this  acknowledges  a  moral  obligation  on  the 
government  to  save  from  loss  those  who  have  followed  the 
guidance  of  its  laws,  it  is  a  question  for  the  statesman.  But 
the  economist  can  urge,  that,  if  the  burden  of  such  bad 
investments  must  be  borne  by  the  public,  it  would  be  pref- 
erable to  have  it  assumed  in  the  shape  of  direct  relief  to  the 
manufacturers,  rather  than  by  a  system  which  is  sure  to 
multiply  such  unfortunate  enterprises,  and  perpetuate  their 
weakness.  That  great  caution  and  forbearance  are  neces- 
sary, in  removing  even  a  false  institution,  is  not  a  maxim 
which  economy  has  to  teach  politics. 

And  here  we  come  face  to  face  with  the  great  practical 
difficulty  of  protection  in  our  country;  that  which,  if  all  its 
principles  were  triumphantly  proved  in  general  reasoning, 
should  still  throw  it  out  of  our  legislation.  If  it  were 
proved  harmless,  if  it  were  proved  beneficial,  there  is  a 
strong  reason  against  ever  attempting  to  realize  it  here. 
That  difficulty  resides  in  the  varying  politics  of  our  coun- 
try. Injurious  as  protection  is  to  the  best  interests  of  the 
country,  any  system  of  it,  however  severe,  would  be  prefer- 
able to  the  "  open-and-shut "  policy,  absolutely  unavoidable 
in  a  government  like  ours.  It  is  not  within  the  bounds  of 
reason  to  suppose  that  the  alternate  successes  of  parties 
will  not  continue  to  convulse  our  national  legislation;  and 
therefore  it  is  with  emphasis  true,  that  a  consistent  system 
of  protection  is  only  possible  in  a  government  with  great 


152     FALLACIES  OF  THE  PROTECTIVE  THEORY. 

conservative  force  and  great  central  powers.  A  represent- 
.ative  body,  embracing  the  most  opposite  interests,  swayed 
by  such  influences  and  intrigues  as  notoriously  possess  such 
an  organization,  and  changed  in  all  its  parts  every  few 
years,  is  not  the  place  in  which  to  adjust  accurately  and 
dispassionately  the  economical  parts  of  a  nation,  and  dis- 
tribute the  agencies  of  production. 

It  is  our  felicity,  that  our  well-being  does  not  depend  on 
such  counsels,  but  that  great  Nature  ,has  fixed  the  forces 
of  industry  in  perfect  harmony,  and  to  the  most  beneficent 
ends. 

To  secure  commercial  independence.  True  commercial 
independence  is  attained  by  any  nation,  when  its  natural 
resources  are  so  developed  and  cultivated  that  it  becomes  a 
power  in  the  world,  can  command  the  products  of  the 
industry  of  every  clime,  because  it  can  furnish  that  which 
all  others  want.  This  is  independence  in  commerce.  ( In- 
dependence of  commerce  is  the  independence  of  the  savage, 
or  of  undiscovered  countries.  To  assume  that  such  inde- 
pendence of  all  mutual  helpfulness  is  desirable,  outrages  the 
earliest  sense  of  humanity. 

But  it  is  claimed  that  such  a  separation  from  all  offices 
of  kindness  is  necessary  to  protect  nations  in  war. 

So  far  as  the  State  urges  the  claims  of  its  own  safety, 
the  principles  of  economic  science  must  be  silent.  But 
this  interference  with  the  laws  of  value,  for  the  preserva- 
tion of  the  national  life,  must  be  strictly  limited  to  the 
absolute  necessities  of  war. 

There  are  many  reasons  to  suppose,  that  this  interference 
is  rarely,  if  ever,  necessary.  There  are  very  few  States 
which  could  not,  on  occasion,  supply  from  their  own  soil 
the  means  of  warfare.  It  would  be  much  better  that 
nations  should,  by  anticipation,  secure  from  abroad  a  suf- 
ficient amount  of  material,  than  by  indirect  efforts  distort 
their  industry  to  an  extent  many  times  greater  than  would 


FALLACIES  OF  THE  PROTECTIVE  THEORY.     153 

be  involved  in  obtaining  beforehand,  by  commerce,  whatever 
might  be  necessary. 

But  finally  and  decisively,  if  it  is  alleged,  under  any  cir- 
cumstances, to  be  essential  that  a  nation  should  possess 
within  itself  the  means  of  war,  we  answer  that  it  should 
undertake  the  manufacture  by  a  special  government  agency, 
not  by  changing  the  entire  industry  of  a  people  to  produce 
this  as  an  incidental  result.  Such  is,  in  fact,  the  procedure 
of  most,  if  not  all,  civilized  nations  and  leaves  no  force 
in  the  plea  for  national  independence.  But  the  argument 
for  protection  from  the  necessities  of  war  has  almost  dis- 
appeared in  the  intenser  light  of  our  growing  civilization. 
The  independence  of  each  nation  in  commerce,  existing 
harmoniously  with  its  dependence  on  commerce,  forms 
the  best  hope  of  peace  and  tranquility  for  the  future.  It 
may  be  safely  assumed,  that  the  probabilities  of  war  be- 
tween any  two  peoples  are  inversely  as  their  commercial 
relations.  The  great  reason  against  war,  in  the  present 
ago,  is  not  the  expense  of  maintaining  armies,  nor  the  de- 
struction of  life,  but  the  interruption  of  trade.  This  not 
only  puts  peacemakers  in  the  councils  at  home,  but  makes 
all  nations  mediators  between  the  parties  at  variance. 

The  intercourse  between  the  United  States  and  Austria 
is  but  trifling.  A  little  fire  would  kindle  great  strife  be- 
tween these  two  peoples.  There  would  be  no  great  motive 
to  forbear  and  adjust  the  occasions  of  dispute.  The  United 
States  and  England,  on  the  other  hand,  have  a  yearly  trade 
of  four  hundred  and  fifty  millions  of  dollars,  which  inter- 
poses itself  between  the  nations,  however  angry,  a  great 
standing  policy  of  peace. 

All  general  economic  principles  urge  the  extinction  of 
war.  All  special  economical  interdependences  postpone 
and  weaken  the  provocations  of  war.  Resting  on  this  prin- 
ciple, we  shall  find  nothing  good  in  the  scheme  of  making 
nations  independent,  that  they  may  the  better  fight.  We 


154  FALLACIES    OF   THE    PROTECTIVE    THEORY. 

shall  recognize  commerce  as  the  great  bond  of  human 
brotherhood. 

But,  after  all  argument  has  been  closed  on  the  principles 
of  protection,  we  still  find  one  plea  remaining.  If  freedom 
of  intercourse,  it  is  said,  were  only  universal,  it  would  be 
well;  but,  since  it  is  not,  each  nation  must  protect  itself, 
and  do  as  it  is  done  by. 

Let  us  suppose  that  England  refuses  to  take  our  wheat. 
Would  that  be  a  good  reason  why  we  should  not  take  iron 
from  her,  if  we  get  it  so,  cheaper  than  by  making  it?  We 
have  already  shown  that  the  protected  suffers  more  than 
the  excluded  community.  If  England  should  exclude  our 
wheat,  whom  would  she  injure?  Ourselves  somewhat,  that 
is,  to  the  extent  of  the  profits  we  should  have  made;  her- 
self still  more,  that  is,  to  the  extent  of  the  vastly  enhanced 
cost  of  the  grain.  If,  in  retaliation,  we  exclude  her  iron, 
whom  do  we  injure?  Her  somewhat;  ourselves  much  more. 

Let  us  examine  more  in  detail  the  consequences  of  our 
exclusion  from  foreign  ports.  If  partial,  we  could  still,  by 
selling  our  wheat,  get  iron  cheaper  than  by  making  it. 

If  total,  the  closing  of  our  markets  for  wheat  could  turn 
our  industry  towards  other  forms  of  production.  This 
would  constitute  one  of  the  conditions  under  which  manu- 
factures would  legitimately  arise;  and  it  would  be  more 
sensible  and  healthful  than  if  it  came  as  the  result  of  our 
own  restrictive  legislation. 

The  full  consequences  of  the  policy  of  retaliation  would 
be,  each  people  refusing  to  receive  the  products  of  others, 
trade  annihilated,  industry  crippled,  all  nations  isolated, 
with  no  mutual  interest  but  robbery  and  plunder. 

We  have  said,  that  England,  by  imposing  a  duty,  say  of 
fifty  per  cent.,  on  our  wheat,  would  injure  us  to  the  extent 
of  our  possible  profits,  and  herself  to  the  extent  of  the 
enhanced  cost  of  the  grain.  On  a  closer  inquiry,  we  shall 
see  that  the  injury  to  ourselves  is  compensated  in  part;  that 
to  herself  is  aggravated. 


FALLACIES   OF   THE   PROTECTIVE   THEORY.  155 

The  consequence  of  such  a  duty  would  be,  that  the  con- 
sumption would  fall  off  in  some  degree.  Her  poor  would 
subsist  more  on  potatoes,  or  other  articles  cheaper  than 
flour.  But,  notwithstanding  these  shifts,  it  would  be  found 
that  it  cost  her  laboring  population  more  to  live,  even 
though  they  lived  more  meanly.  Their  wages  must  be 
raised;  this  is  certain.  All  taxes  laid  on  commodities 
which  the  laborer  must  use  have  the  effect  to  reduce  the 
quantity  or  quality  of  his  food  to  a  certain  point;  but  he 
must  live,  and  his  wages  must  be  raised  to  enable  him  to 
do  so  with  the  enhanced  price  of  wheat.  This  would  make 
it  more  expensive  for  England  to  manufacture  her  goods, 
and  would,  in  part,  so  far  reduce  her  ability  to  compete  in 
the  markets  of  the  world.  By  such  a  policy,  she  would 
weaken  her  own  industry,  and  to  a  degree  exclude  herself 
from  commerce.  This  would  afford  another  condition 
under  which  manufactures  would  legitimately  arise  in  this 
country,  whose  wheat  was  excluded. 

That  this  is  no  impossible  supposition,  will  be  evidenced 
by  the  condition  of  England  before  the  repeal  of  the  corn 
laws.  The  movement  in  favor  of  that  great  measure  origi- 
nated in  Manchester,  and  was  carried,  against  the  nobility 
and  the  landed  interest,  by  the  resolute  efforts  of  the  manu- 
facturing class. 

What  advantage  is  there  in  refusing  to  buy  of  a  nation 
because  it  refuses  to  buy  of  us?  It  is  retaliation  and 
revenge,  not  self-defence  or  self-vindication.  The  first 
historical  instance  of  such  retaliatory  legislation  is  the 
establishment,  by  the  Venetians,  of  customs  duties,  to  de- 
•  prive  foreigners  of  the  benefit  of  their  trade;  in  return  for 
which,  Charles  Y  imposed  twenty  per  cent,  duty  on  all 
Venetian  merchandise.  The  most  wise  and  useful  econom- 
ical act  of  this  century,  was  that  *by  which,  by  the  exertions 
of  Mr.  Cobden,  Eng^nd  and  France,  so  long  contending 
only  in  exclusions  and  mutual  injuries,  threw  open  their 


156     FALLACIES  OF  THE  PROTECTIVE  THEORY. 

ports  to  the  free  entry  of  hundreds  of  articles,  to  the  com. 
mon  benefit  of  both,  and  to  the  advancement  of  good  feeling 
and  hearty  alliance;  a  measure,  that,  between  the  years 
1859  and  1863,  increased  by  seventy-three  per  cent,  the 
trade  of  Great  Britain  with  France,  while  proving  no  less 
beneficial  to  the  labor  of  the  latter  country. 

We  infer,  from  all  that  has  preceded,  that,  " protection" 
is  an  unfortunate  expression.  To  restrict  industry,  to  put 
the  bad  on  the  level  of  the  good,  to  remove  from  industry 
its  only  guaranty  of  a  full  reward,  to  contract  trade  and 
neutralize  the  gifts  of  Nature,  is  not  protection,  in  any 
proper  sense  of  the  wrord. 

In  conclusion  of  the  subject,  it  may  be  proper  to  allude 
to  the  great  natural  characteristics  of  our  national  indus- 
try. We  see  that  the  important  fact  of  our  condition  is 
unequaled  agricultural  power.  Possessing  such  an  advan- 
tage, with  an  active,  enlightened,  and  enterprising  popula- 
tion, and  an  industry  perfectly  untrammelled,  we  should 
naturally  become  the  granary  of  the  world,  and  create,  as  a 
certain  consequence,  the  most  extensive  and  powerful  com- 
mercial and  naval  marine  on  the  globe.  We  should  secure, 
by  sea  and  land,  a  greater  power  to  give  help  to  friends,  or 
hurt  to  foes,  than  any  other  people,  and  should  rapidly  attain 
our  best  national  condition. 

We  should  have,  not  only  the  most  profitable,  but  the 
most  salutary  industry,  as  favorable  to  the  acquisition  of 
unlimited  wealth  as  to  a  sound  physical  development  and 
high  moral  culture.  We  should  have  manufactures,  also,  in 
their  spontaneous  growth.  They  would  arise — they  were 
arising  previous  to  any  tariff — as  fast  as  the  best  interests  of 
the  country  required  them. 

States  and  sections,  like  New  England,  would  naturally 
and  profitably  undertake  manufactures,  because  they  have  a 
thinner  soil,  a  denser  population,  and  a  larger  capital  rela- 
tively, than  others.  Such  regions  would  be  the  work-shops 


FALLACIES    OF    THE    PROTECTIVE    THEORY.  157 

of  the  nation,  while  the  prairies  of  the  West  and  the  rich 
uplands  of  the  Middle  States  would  be  the  nation's  farms. 

What  manufactures  arise  of  themselves  should  be  welcomed, 
for  they  come  in  obedience  to  natural  laws;  they  are  founded 
on  extraordinary  facilities,  on  high  natural  protection,  on 
local  necessities.  But  we  bind  the  swelling  thews  of  the 
youth  when  we  endeavor  to  force  on  America  the  industry 
of  Europe.  We  grow  enough  every  year  to  cover  some  of 
the  kingdoms  of  the  old  world.  Every  year's  growth 
stretches  over  and  appropriates  some  country,  fertile  as  the 
plains  of  the  Nile,  and  bearing  every  manner  of  precious  or 
useful  ore.  Here  is  our  destiny.  This  is  our  wealth. 

It  cannot  be  too  often  repeated,  because  it  is  the  great 
fact  in  regard  to  manufactures,  that  they  only  need  to  be 
"let  alone."  When  a  distinguished  French  minister  of 
finance  called  the  manufacturers  of  that  country  to  Paris, 
and  asked  what  he  could  do  for  them,  they  made  the  well 
known  answer,  u  Laissez  nous  faire"  It  is  within  our  per- 
sonal knowledge  that  when  the  proposal  was  made  to  impose 
the  protective  tariff  of  1816,  the  leading  manufacturers  of 
Rhode  Island,  amongst  whom  was  the  late  Mr.  Slater,  the 
father  of  cotton-spinning  in  this  country,  met  at  the  counting- 
room  of  one  of  their  number,  and,  after  deliberate  consultation 
upon  the  matter,  came  unanimously  to  the  conclusion  that  they 
had  "  rather  be  let  alone."  Their  business  had  grown  up 
naturally,  and  succeeded  well;  and  they  felt  confident  of  its 
continued  prosperity,  if  uninterfered  with  by  government. 
On  the  other  hand,  they  argued  that  by  laying  a  protective 
tariff  the  business  would  be  thrown  out  of  its  natural  chan- 
nels, and  become  fluctuating  and  uncertain.  How  well 
founded  were  these  anticipations  subsequent  events  have 
fully  shown. 

It  will,  doubtless,  be  a  matter  of  profound  astonishment 
to  the  future  historian  that  a  people  who  had  a  free  and 
untrammeled  industry,  with  natural  advantages  for  the 


158  FALLACIES    OF    THE    PROTECTIVE    THEORY. 

most  productive  agriculture  in  tlie  world,  and  for  the  legiti- 
mate growth  of  every  kind  of  manufacture,  should  ever 
have  asked  for  restrictions  upon  trade.  But,  in  truth,  they 
did  not  ask  for  protection  at  the  outset.  It  was  forced  upon 
them  by  politicians,  irrespective  of  their  wishes,  for  the 
avowed  purpose  of  securing  a  home  market  for  cotton. 

All  New  England  was  opposed  to  the  policy,  and  protested 
against  it;  yet  it  was  carried.  Special  forms  of  manufactur- 
ing were  brought  into  existence;  and,  as  these  were  sickly 
and  needed  all  the  help  they  could  obtain  from  government, 
an  interested  party  was  formed  which  clamored  incessantly 
for  protection.  Yet  it  was  not  until  the  third  tariff,  that  of 
1824,  had  gone  into  operation,  that  the  Northern  and  Cen- 
tral States  became  the  partisans  of  protection.  As  New 
England  was  the  last  to  assent  to  restrictive  legislation,  so 
she  will  undoubtedly  be  the  first  to  ask  for  its  abandonment. 
No  policy  could  be  more  adverse  to  her  permanent  interests. 
She  has  great  natural  advantages  for  manufacturing.  With 
these,  she  can  carry  them  on  successfully.  By  high  protec- 
tive duties  other  sections  of  the  country  not  having  the  same 
natural  advantages  will  be  led  to  introduce  the  same 
branches  of  industry,*  and  she  will  find  her  severest  com- 
petition at  home;  while  all  parts  of  the  nation  will  be  crip 
pled  by  a  false  system,  equally  against  the  laws  of  nature 
and  value;  since  protection,  as  previously  shown,  puts  the 
bad  on  a  level  with  the  good,  and  destroys  all  natural  tests 
of  usefulness  in  production.  It  should  always  be  borne  in 
mind  that  protective  duties  must  be  high  enough  to  enable 
the  home  manufacturer  to  get  at  least  average  profits;  that 
is,  such  profits  as  commodities  in  general  afford.  He  will 
not  make  broadcloth  unless  it  is  as  profitable  as  any  other 
branch  of  trade,  manufacture,  or  agriculture.  Nothing 
short  of  this  is  protection;  and  the  duties  must  be  carried 
upwards  until  they  arrive  at  that  point  in  which  those  who 

*  This  is  already  becoming  quite  apparent. 


FALLACIES  OF  THE  PROTECTIVE  THEORY.     159 

are  manufacturing  to  the  greatest  disadvantage  can  make  aver- 
age profits;  otherwise  there  will  be  a  call  for  higher  duties. 
This  is  one  of  the  practical  difficulties  of  protection.  The 
higher  the  duties  imposed  the  greater  will  be  the  rush  into 
the  protected  branch  of  industry;  and  none  will  be  satisfied 
until  they  make  the  business  profitable,  however  imperfectly 
conducted.  Hence  there  will  be  a  constant  call  for  increased 
duties.  Witness  the  history  of  protection  in  the  United 
States, — a  tariff  in  1816,  a  higher  one  in  1820,  higher  yet  in 
1824,  still  higher  in  1828,  with  continued  changes  from  that 
time  to  this. 


CHAPTER  X. 

THE     DOCTRINE     OF     INTERNATIONAL     EX- 

CHANGES:  THE  LIMITS  OF   FREE  TRADE 

AND  THE  PROTECTIVE  SYSTEM* 

BY  PEOF.  FRANCIS  BOWEN, 

Alford  Professor  of    Natural   Religion,    Moral  Philosophy,   and 
Civil  Polity  in  Harvard  University. 


IT  has  now  been  shown  that  prices  are  determined  by  the 
relation  of  the  demand  to  the  supply,  and  that  an  ex- 
tension  of  the  market,  or  an  increase  of  the  demand,  can  be 
obtained  only  by  submitting  to  a  fall  of  prices,  so  as  to  bring 
the  article  within  the  reach  of  a  greater  number  of  consum- 
ers. In  any  market  only  a  certain  quantity  of  goods  at  a 
given  price  can  be  consumed;  if  more  goods  are  forced  upon 
the  market  than  it  naturally  requires,  the  price  must  fall,  and 
then  the  consumption  may  be  very  much  increased. 

It  has  also  been  proved  that  we  really  purchase  commodi, 
ties  with  commodities ;  that  we  pay  for  our  whole  imports 
with  our  whole  exports;  that  if,  in  our  traffic  with  any  one 
country,  our  imports  much  exceed  our  exports,  then  we  pay 
the  balance,  not  in  money,  but  by  transferring  to  that  coun- 
try the  debt  due  to  us  from  another  country  with  which  our 
trade  is  such  that  our  exports  exceed  our  imports.  It  is 
only  the  balance  of  the  immensely  long  "  account-current " 
of  our  trade  with  all  foreign  countries  whatsoever  which  is 
struck  in  money;  and  this  cash  balance  cannot  be  more  than 
an  insignificant  fraction  of  either  side  of  the  account. 

*  American  Political  Economy,  1870  Edition. 

(160) 


INTERNATIONAL   EXCHANGES.  161 

The  advocates  for  free  trade  have  always  insisted  that 
we  must  buy  merchandise  of  England,  not  only  to  induce, 
but  even  to  enable  England  to  buy  merchandise  of  us;  that 
We  must  buy  of  any  country  in  order  to  sell  to  her,  and 
must  buy  as  much  as  we  sell.  But  it  is  not  so.  It  is 
not  necessary  that  we  should  take  enough,  of  English 
manufactured  goods  to  pay  us  for  all  the  cotton,  tobacco, 
and  wheat  which  we  sell  to  England.  England  is  able,  though 
of  course  she  is  not  very  willing,  to  pay  us  the  balance  in 
tea  from  China,  coffee  from  Brazil,  hemp  from  Russia,  or 
whatever  other  article,  from  whatever  other  country,  we  see 
fit  to  require.  We  can  compel  her  to  pay  us  in  whatever 
commodities  we  may  select;  for  the  articles  which  we  sell  to 
England,  cotton,  tobacco,  and  wheat,  are  of  prime  necessity 
to  her,  and  most  of  them  she  cannot  obtain  elsewhere.  As 
our  exports  must  pay  for  our  imports,  the  only  point  to  be 
considered  is,  how  we  can  dispose  of  the  exports  to  most 
advantage,  or  obtain  for  them  the  largest  return  of  the 
imports. 

The  cost  to  us  of  our  domestic  products  is,  the  labor  that 
is  expended  upon  their  production.  But  the  cost  to  us  of 
foreign  products  is,  not  the  labor  which  has  been  expended 
upon  their  production,  but  the  labor  which  we  must  expend 
upon  the  articles  that  are  given  in  exchange  for  those 
products. 

"  The  advantage  of  an  interchange  of  commodities  between 
nations,"  says  Mr.  Mill,  "  consists  simply  and  solely  in  this, 
— that  it  enables  each  to  obtain,  with  a  given  amount  of 
labor  and  capital,  a  greater  quantity  of  all  commodities  taken 
together.  This  it  accomplishes  by  enabling  each,  with  a 
quantity  of  one  commodity  which  has  cost  it  so  much  labor 
and  capital,  to  purchase  a  quantity  of  another  commodity, 
which,  if  produced  at  home,  would  have  required  labor  and 
capital  to  a  greater  amount.  To  render  the  importation  oi 
an  article  more  advantageous  than  its  production,  it  is  not 


162  INTERNATIONAL   EXCHANGES. 

necessary  that  the  foreign  country  should  be  able  to  produce 
it  with  less  labor  and  capital  than  ourselves.  We  may  even 
have  a  positive  advantage  in  its  production;  but  if  we  are 
so  far  favored  by  circumstances  as  to  have  a  still  greater 
positive  advantage  in  the  production  of  some  other  article 
which  is  in  demand  in  the  foreign  country,  we  may  be  able 
to  obtain  a  greater  return  to  our  labor  and  capital  by  employ- 
ing none  of  it  in  producing  the  article  in  which  our  advan- 
tage is  least,  but  devoting  it  all  to  the  production  of  that  in 
which  our  advantage  is  greatest,  and  giving  this  to  the 
foreign  country  in  exchange  for  tha  other.  It  is  not  a 
difference  in  the  absolute  cost  of  production,  which  deter- 
mines the  interchange,  but  a  difference  in  the  comparative 
cost." 

The  inhabitants  of  Barbadoes,  for  instance,  favored  by 
their  tropical  climate  and  fertile  soil,  can  raise  provisions 
cheaper  than  we  can  in  the  United  States.  And  yet  Barba- 
does buys  nearly  all  her  provisions  from  this  country.  "Why 
is  this  so  ?  Because,  though  Barbadoes  has  the  advantage 
over  us  in  the  ability  to  raise  provisions  cheaply,  she  has  a 
still  greater  advantage  over  us  in  her  power  to  produce  sugar 
and  molasses.  If  she  has  an  advantage  of  one-quarter  in 
raising  provisions,  she  has  an  advantage  of  one-half  in 
regard  to  products  exclusively  tropical  ;  and  it  is  better  for 
her  to  employ  all  her  labor  and  capital  in  that  branch  of 
production  in  which  her  advantage  is  greatest.  She  can 
thus,  by  trading  with  us,  obtain  our  breadstuff s  and  meat  at 
a  smaller  expense  of  labor  and  capital  than  they  cost  our- 
selves. If,  for  instance,  a  barrel  of  flour  cost  ten  days'  labor 
in  the  United  States,  and  only  eight  days'  labor  in  Barba- 
does, the  people  of  Barbadoes  can  still  profitably  buy  the 
flour  from  this  country,  if  they  can  pay  for  it  with  sugar 
which  cost  them  only  six  days'  labor;  and  the  people  of  this 
country  can  profitably  sell  them  the  flour,  or  buy  from  them 
the  sugar,  provided  the  sugar,  if  raised  in  the  United  States, 


INTERNATIONAL   EXCHANGES.  163 

would  cost  eleven  days'  labor.  This  is  a  striking  example 
to  show  the  benefit  of  foreign  trade  to  both  the  countries 
which  are  parties  to  it.  The  United  States  receive  sugar, 
which  would  have  cost  them  eleven  days'  labor,  by  paying 
for  it  with  flour  which  costs  them  but  ten  days.  Barbadoes 
receives  flour,  which  would  have  cost  her  eight  days'  labor, 
by  paying  for  it  with  sugar  which  costs  her  but  six  days 
If  Barbadoes  produced  both  commodities  with  greater  facil- 
ity, but  greater  in  precisely  the  same  degree,  there  would 
be  no  motive  for  interchange. 

Now  let  us  apply  these  principles  to  the  trade  between 
England  and  the  United  States.  To  simplify  the  matter, 
we  will  take  but  one  article,  flour,  as  representing  all  the 
commodities  that  America  sells  to  England  ;  and  but  one 
article,  cloth,  as  representing  all  the  goods  which  England 
sells  to  America.  Suppose,  on  account  of  the  respective 
advantages  possessed  by  the  two  countries,  that  the  produc- 
tion of  one  barrel  of  flour  in  England  costs  as  much  labor 
and  capital  as  would  suffice  for  the  manufacture  of  ten  yards 
of  cloth;  while  in  America,  one  barrel  of  flour  can  be  pro- 
duced for  three-fifths  of  its  cost  in  England, — that  is,  for  as 
much  labor  and  capital  as  would,  in  England,  manufacture 
only  six  yards  of  cloth. 

Now,  if  a  system  of  free  trade  between  the  two  countries 
be  established,  the  two  commodities  will  be  exchanged  for 
each  other  at  the  same  rate  both  in  England  and  America. 
The  price  will  be  equalized  between  the  two  countries  ;  but 
at  what  point  will  it  be  equalized  ?  Shall  the  English  price 
be  established  in  America,  or  shall  the  American  price  be 
established  in  England?  Or  shall  a  price  intermediate 
between  the  two  be  established  ?  Either  of  these  three 
suppositions  is  possible.  The  Englishman  can  afford  to  give 
ten  yards,  for  it  will  cost  him  that  amount  of  labor  and 
capital  to  produce  the  flour  in  his  own  country,  or  for  him- 
self. On  the  other  hand,  the  American  can  afford  to  sel] 


164  INTERNATIONAL   EXCHANGES. 

the  flour  for  six  yards,  because  this  quantity  of  cloth,  if 
produced  in  his  own  country,  would  cost  him  more  than  the 
flour.  Suppose  that,  by  the  higgling  of  the  market,  the 
price  in  both  countries  is  fixed  at  seven  yards.  The  advan- 
tage of  the  trade  is  then  shared  between  the  two  countries, 
but  it  is  shared  unequally.  America  gains  one  yard  on  each 
barrel,  as  she  now  receives  seven  yards  of  cloth  for  the  labor 
which  formerly  produced  but  six  ;  England  gains  three 
yards  on  each  barrel,  for  the  flour  now  costs  her  but  seven 
yards  a  barrel,  while  it  formerly  cost  her  ten.  We  will 
suppose  that,  at  these  rates,  America  sells  100,000  barrels 
of  flour  to  England,  and  receives  in  exchange,  of  course, 
700,000  yards  of  cloth.  The  demand  on  each  side  must  be 
just  sufficient  to  carry  off  the  supply  received  on  the  other. 
So  long  as  England  wants  only  this  amount  of  flour,  and 
the  United  States  only  this  quantity  of  cloth,  the  inter- 
change will  continue  at  this  rate,  giving  three-fourths  of 
the  profits  to  Great  Britain,  and  only  one- fourth  tc  this 
country. 

But  suppose  the  demand  to  vary  in  one  of  the  two 
countries  ;  suppose  that  England,  on  account  of  the  increase 
of  her  population,  now  needs  150,000  barrels  of  flour,  which 
America  is  perfectly  able  and  willing  to  furnish.  But  Eng- 
land can  pay  for  this  larger  purchase  only  by  sending  over 
more  cloth  ;  the  United  States,  however,  by  the  supposi- 
tion, are  fully  supplied  with  the  700,000  yards  which  they 
received  before  ;  they  cannot  buy  any  more  at  the  old  rate 
of  seven  yards  for  one  barrel.  How,  then,  is  England  to 
obtain  the  additional  quantity  of  flour  that  she  needs  ?  She 
has  but  one  course  to  pursue;  she  must  offer  her  cloth  at 
a  reduced  price,  knowing  that  this  reduced  price  will  bring 
it  within  the  reach  of  a  larger  class  of  consumers.  Instead 
of  seven,  she  will  now  offer  nine  yards  of  cloth  for  a  barrel 
of  flour.  At  this  price,  the  Americans  may  be  willing  and 
able  to  buy  1,350,000  yards  of  cloth,  which  will  furnish  the 


INTERNATIONAL    EXCHANGES.  165 

150,000  barrels  of  flour  required  by  England  ;  or,  if  we  do 
not  need  this  large  quantity  of  cloth,  England  has  only  to 
sell  this  quantity,  at  the  reduced  price,  to  other  countries, 
and  obtain  in  exchange  for  it  tea,  coffee,  sugar,  and  other 
products,  which,  at  this  reduced  price  again,  we  do  need. 
If  we  do  not  receive  the  benefit  of  the  change  of  price  in 
cloth,  we  shall  receive  it  in  other  commodities. 

There  is,  indeed,  one  other  mode  by  which  England  might 
obtain  the  additional  quantity  of  flour  required,  without 
lowering  the  price  of  her  cloth.  Suppose  that  the  demand 
of  the  United  States  for  cloth  had  been  kept  down  to 
700,000  yards  by  a  protective  tariff,  the  revenue  from  which 
paid  the  expenses  of  the  government,  though  it  somewhat 
enhanced  the  price  of  cloth  to  the  people.  Suppose,  further, 
that  the  government,  learning  that  England  was  inclined  to 
purchase  more  flour  of  us,  in  order  to  favor  that  inclination, 
should  determine  to  abolish  the  tariff,  and  admit  cloth  duty 
free,  or  at  a  nominal  duty.  Then,  indeed,  the  demand  for 
cloth  might  be  so  far  increased,  that  England  might  obtain 
her  150,000  barrels  of  flour  by  paying  for  it  at  the  rate 
of  seven  yards  to  a  barrel.  We  should,  indeed,  sell  the 
increased  quantity  of  breadstuff s,  but  should  receive  for  it 
only  1,050,000,  instead  of  1,350,000,  yards  of  cloth.  By 
this  act  of  legislation,  also,  we  should  be  obliged  to  pay  the 
expenses  of  the  government  by  direct  taxation,  should  have 
our  domestic  manufactures  ruined,  and  the  profits  of  the 
agriculturists  much  diminished  by  the  influx  into  their  busi- 
ness, and  the  consequent  competition,  of  the  disbanded 
Workmen  from  the  manufactories. 

America  produces  chiefly  raw  material,  because  she  has 
the  advantages  of  a  more  extensive  territory  and  a  more 
fertile  soil  ;  England  produces  chiefly  manufactured  goods, 
because  she  has  the  advantages  of  more  capital,  longer  expe- 
rience, and  cheaper  labor.  Now  the  doctrine  of  free  trade 
(which  is  a  perfectly  sound  and  just  doctrine,  if  applied  to  two 
countries  that  are  similarly  situated  in  every  respect),  if 


106  INTERNATIONAL   EXCHANGES. 

applied  in  this  case,  would  teach  the  Americans  to  give  them- 
selves exclusively  to  the  production  of  raw  material,  and  the 
English  exclusively  to  manufactures,  on  the  ground  that  each 
could  purchase  of  the  other  what  it  would  then  need,  more 
profitably  than  it  could  produce  that  article  for  itself.  Let  us 
suppose  that  the  Americans  adopt  this  advice,  and  raise  noth- 
ing but  raw  material.  What  will  be  the  consequence  ? 

As  every  civilized  nation  must  consume  more  value  vested 
in  manufactured  goods  than  in  raw  material  (without  reckon- 
ing tea,  coffee,  and  tropical  products,  which  must  be  brought 
from  abroad),  it  is  evident  that  we  must  be  constantly  pressed 
to  purchase  from  foreign  countries  more  than  we  can  easily 
pay  for  by  selling  to  them  raw  material.  In  order,  then,  to 
enlarge  the  foreign  market  for  our  cotton,  tobacco,  and  flour, 
we  must  offer  them  on  the  most  favorable  terms.  We  must 
offer  them  at  the  American  price,  say  of  one  hundred-weight 
for  six  pounds  of  manufactures,  rather  than  at  the  foreign 
price,  which  they  would  otherwise  naturally  assume,  of  one 
hundred- weight  for  ten  pounds.  At  this  foreign  price,  it 
may  be  assumed  that  we  should  procure  only  200,000  pounds 
of  manufactured  goods, — not  enough  to  supply  our  wants. 
But  in  order  to  obtain  more,  we  must  be  able  to  sell  more; 
and  in  order  to  sell  more,  we  must  offer  the  raw  material  at 
a  lower  price,  so  as  to  enable  a  greater  number  of  foreigners 
to  purchase  it.  The  principle  is,  then,  that  whichever  nation 
is  under  the  strongest  temptation  or  necessity  to  buy  from 
others, — whichever  needs  to  buy  more  value  than  it  can 
readily  sell, — that  nation  labors  under  a  disadvantage  in  the 
traffic,  and  must  offer  its  own  commodities  at  the  lowest 
possible  price. 

"At  the  lowest  price  which  is  possible,"  we  say;  for  the 
theory  shows  clearly  that  there  are  limits  beyond  which  the 
price  can  neither  be  elevated  nor  depressed.  We  cannot 
sell  for  less  than  six  pounds,  because  the  cost  of  producing 
a  hundred -weight  of  raw  material  would,  with  all  our  dis- 
advantages in  manufacturing,  enable  us  to  manufacture  six 


INTERNATIONAL    EXCHANGES.  107 

pounds  of  such  goods  for  ourselves.  Neither  can  we  obtain 
more  than  ten  pounds,  because  the  labor  and  capital  bestowed 
on  eleven  pounds  of  these  goods  would  enable  the  English, 
in  spite  of  their  disadvantages  in  regard  to  raw  produce,  to 
raise  one  hundred -weight  of  it  for  themselves.  Within 
these  limits,  then,  is  the  sphere  of  operation  of  a  protective 
tariff;  beyond  them  is  the  sphere  of  free  trade.  Prohibitory 
duties  are  always  unwise;  for  the  object  is  to  check  con- 
sumption, not  to  destroy  foreign  trade. 

The  purpose  of  a  protective  tariff  is  to  secure  to  each 
nation  the  use  of  its  own  natural  advantages;  or  rather,  to 
prevent  it  from  throwing  these  natural  advantages  away  by 
too  assiduous  and  exclusive  cultivation  of  them,  the  effect  of 
which  would  be,  that  the  other  arts  and  branches  of  industry 
would  perish  by  neglect.  A  community  cannot  prosper  by 
devoting  all  its  energies  to  the  cultivation  of  but  one  of  the 
three  great  branches  of  industry.  Devoted  to  agriculture 
alone,  or  to  manufactures  alone,  or  to  commerce  alone,  it 
makes  no  difference; — in  either  case,  it  will  have  but  one 
class  of  articles  to  sell,  while  it  will  have  two  classes  of 
articles  to  purchase; — in  either  case  it  will  have  a  greater 
surplus  of  one  kind  to  dispose  of,  than  other  nations  will  be 
willing  or  able  to  purchase,  except  at  the  lowest  possible 
price; — and  to  sell  at  the  lowest  possible  price,  as  we  have 
now  demonstrated,  is  to  sacrifice  the  whole  of  the  natural 
advantage  with  which  we  are  endowed  by  nature,  and  to  put 
ourselves  on  a  par  with  other  countries  in  this  respect,  while 
we  are  below  them  in  every  other  respect. 

That  the  protective  policy  here  advocated  is  consistent  with 
the  doctrines  of  political  economy,  as  that  science  is  usually 
taught  in  Europe,  must  appear  from  the  limitations  of  the 
theory  already  laid  down,  and  from  the  fact  that  this  theory 
is  frankly  accepted  even  by  those  English  economists  who 
stoutly  maintain  the  general  doctrine  of  free  trade.  For 
propf,  I  quote  from  John  Stuart  Mill. 


168  INTERNATIONAL    EXCHANGES. 

"If  it  be  asked,"  he  says,  "what  country  draws  to  itself 
the  greatest  share  of  the  advantages  of  any  trade  it  carries 
on,  the  answer  is, — the  country  for  whose  productions  there 
is  in  other  countries  the  greatest  demand,  and  a  demand  the 
most  susceptible  of  increase  from  additional  cheapness.  In 
so  far  as  the  productions  of  any  country  possess  this 
property,  the  country  obtains  all  foreign  commodities  at  less 
cost.  It  gets  its  imports  cheaper,  the  greater  the  intensity 
of  the  demand  in  foreign  countries  for  its  exports.  It  also 
gets  its  imports  cheaper,  the  less  the  extent  and  intensity  of 
its  own  demand  for  them.  The  market  is  cheapest  to  those 
whose  demand  is  small.  A  country  which  desires  few 
foreign  productions,  and  only  a  limited  quantity,  while  its 
own  commodities  are  in  great  request  in  foreign  countries, 
will  obtain  its  limited  imports  at  extremely  small  cost, — that 
is,  in  exchange  for  the  produce  of  a  very  small  quantity  of 
its  labor  and  capital." 

Consequently,  he  argues,  "  the  opening  of  a  new  branch 
of  export  trade;  or  an  increase  in  the  foreign  demand  for 
our  products,  either  by  the  natural  course  of  events,  or  by 
an  abrogation  of  duties;  or  a  check  to  our  demand  for 
foreign  commodities  by  the  laying  on  of  import  duties  at 
home,  or  of  export  duties  elsewhere; — these,  and  all  other 
events  of  similar  tendency,  would  make  our  imports  no 
longer  a  balance  for  our  exports;  and  the  countries  which 
take  our  exports  would  be  obliged  to  offer  their  commodities 
(specie  among  the  rest)  on  cheaper  terms,  in  order  to 
re-establish  the  equation  of  demand;  and  thus  we  should 
obtain  money  cheaper,  and  acquire  a  generally  higher  rate  of 
-  Incidents  the  reverse  of  these  would  produce  effects 
the  reverse, — would  reduce  prices." 

It  appears,  then,  that  it  is  even  more  for  the  interest  of 
American  planters  and  agriculturists,  than  of  the  manufac- 
turers themselves,  that  duties  should  be  laid  on  the  importa- 
tion of  foreign  manufactured  goods,  so  as  to  restrict  the 


INTERNATIONAL    EXCHANGES.  169 

amount  of  such  importation.  We  thus  purchase  our  imports 
more  cheaply,  or,  what  is  the  same  thing,  as  commodities 
are  actually  bartered  for  commodities,  we  sell  our  exports  at 
a  higher  price.  The  effect  of  the  duty  is,  not  to  raise  the 
price  of  the  imported  articles,  but  to  cheapen  them,  the  duty 
actually  falling  in  great  part  upon  the  foreign  manufacturer. 
For  instance:  What  would  be  the  probable  effect  of  rais- 
ing the  duty  from  10  to  35  per  cent,  upon  all  the  imported 
articles  which  come  in  competition  with  American  manufac- 
tures? Suppose  the  value  of  such  articles  did  not  exceed 
200  millions;  the  other  imports  being  of  such  commodities, 
— tea,  coffee,  drugs,  raw  materials,  and  the  like, — that  we 
should  be  obliged,  under  any  circumstances,  to  purchase 
them  of  foreigners.  Even  if  the  heavier  duty  on  the  com- 
peting articles  should  reduce  the  amount  imported  to  100 
millions,  the  revenue  of  our  own  government  would  be 
much  increased  by  the  alteration.  But  England,  from  whom 
we  import  most  of  the  competing  goods,  would  still  need  to 
obtain  from  us  as  much  vegetable  food,  tobacco,  and  cotton 
as  ever ;  and  her  sale  of  her  own  manufactures  to  the  United 
States  being  diminished  to  the  extent  of  100  millions,  she 
would  be  obliged  to  offer  to  all  nations,  the  United  States 
included,  these  manufactures,  and  other  commodities  also, 
at  lower  prices.  Compelled  to  seek  an  extension  of  the 
foreign  market  for  whatever  she  has  to  sell,  she  must  submit 
to  a  reduction  of  price,  in  order  to  bring  her  commodities 
within  the  reach  of  a  larger  class  of  consumers.  American 
consumers,  for  instance,  would  not  take  even  half  as  much 
as  before,  if  the  price  in  this  country  were  enhanced  to  the 
full  extent  of  the  additional  duty, — that  is,  25  per  cent. 
England  would  have  to  bear  probably  15  per  cent,  of  this 
duty,  or  to  reduce  her  prices  in  this  proportion,  leaving  the 
American  price  to  be  enhanced  10  per  cent.,  which  would 
be  encouragement  enough  to  set  additional  manufactories  in 


170  INTERNATIONAL    EXCHANGES. 

motion  in  the  United  States,  so  as  to  produce  at  home  the 
50  millions'  worth  cut  off  from  our  imports. 

Already,  then,  we  see  the  fallacy  of  the  oft-repeated 
assertion  by  the  advocates  of  free  trade,  that  a  protective 
duty  raises  the  price  both  of  the  home  commodity  and  of 
the  foreign  one  which  continues  to  be  imported,  to  the  full 
extent  of  that  duty.  If  the  impost  be  not  so  great  as  to  be 
virtually  prohibitive, — in  which  case  we  admit  it  would  be 
impolitic, — the  home  price  cannot  be  increased  to  the  extent 
of  more  than  one-half,  seldom  more  than  two-fifths,  of  the 
duty.  Everywhere  the  inequality  in  the  distribution  of 
wealth  is  such,  that  the  class  of  persons  having  an  income, 
for  instance,  of  $2,500  a  year,  is  not,  as  we  might  bo 
tempted  by  a  superficial  glance  at  the  subject  to  believe,  only 
25  per  cent,  less  numerous  than  the  class  having  $2,000  a 
year;  but  is  probably  not  more  than  half  as  large.  If,  then, 
the  price  should  rise  to  the  full  extent  of  the  duty,  say  25 
per  cent.,  the  total  consumption  would  not  be  more  than  half 
as  great,  as  only  those  would  buy  who  have  an  income  at 
least  one-fourth  larger  than  the  smallest  income  possessed  by 
any  of  the  former  purchasers;  but  a  portion  of  what  is  con- 
sumed being  now  of  home  production,  the  importation  of 
the  article  would  fall  off  more  than  50  per  cent. 

This  reasoning,  it  is  true,  applies  only  to  the  somewhat 
finer  and  more  costly  articles  of  manufacture,  for  which 
alone  a  protective  duty  is  needed.  In  respect  to  breadstuffs 
and  other  articles  of  prime  necessity,  we  have  already  seen 
that  a  very  considerable  enhancement  of  price  is  needed,  in 
order  materially  to  lessen  the  consumption.  The  sale  of  the 
cheaper  and  more  common  products  of  manufacturing 
industry,  also,  may  not  be  much  checked  by  an  addition  of 
20  or  30  per  cent,  to  their  price,  as  their  cost  forms  but  a 
small  part  of  the  total  expenditure  of  any  class  of  persons. 
But  the  principle  holds  true  in  the  only  cases  in  which  we 
need  to  apply  it. 


INTERNATIONAL    EXCHANGES.  171 

The  situation  of  the  United  States  is  so  peculiar,  that 
arguments  drawn  from  European  experience  for  the  guid- 
ance of  American  legislation  are  apt  to  be  wholly  fallacious 
and  unsound.  We  can  more  profitably  go  for  a  lesson  to 
the  other  side  of  the  habitable  globe;  I  mean,  to  British 
India.  There  we  find  a  deficiency  of  capital,  an  abundance 
of  fertile  territory,  a  consequent  surplus  of  agricultural 
produce,  and  a  lack  of  that  skill  in  manufacture  which  can 
only  be  gained  by  long  experience  under  a  strict  protective 
policy,  such  as  England  has  enjoyed  for  nearly  two  cent- 
uries;—  all  these  circumstances  strongly  reminding  us  of 
corresponding  features  in  our  own  condition.  Now,  the 
Governor  of  India,  in  a  correspondence  with  the  East  India 
Company  on  the  subject  of  the  Dacca  weavers,  made  this 
statement:  "  Some  years  ago,  the  East  India  Company 
annually  received  of  the  produce  of  the  looms  of  India  to 
the  amount  of  six  to  eight  million  pieces  of  cotton  goods. 
The  demand  gradually  fell,  and  has  now  ceased  altogether. 
European  skill  and  machinery  have  superseded  the  produce 
of  India.  Cotton  piece-goods,  for  ages  the  staple  manufac- 
ture of  India,  seem  forever  lost;  and  the  present  suffering 
to  numerous  classes  in  India  is  scarcely  to  be  paralleled  in 
the  history  of  commerce." 

This  example  throws  light  upon  another  reason,  already 
urged  in  another  place,  for  the  establishment  of  a  protec- 
tive policy  in  America,  as  well  as  in  India;  —  I  mean,  the 
great  difference  in  the  cost  of  transportation  between  raw 
materials  and  manufactured  goods,  which  operates  greatly  to 
the  advantage  of  the  country  producing  the  latter,  because 
manufactures  have  much  the  greater  value  in  the  smaller 
weight  and  bulk.  Rice,  wheat,  cotton,  and  sugar  are  among 
what  might  be  called  the  greatest  natural  exports  of  India,  as 
they  are  produced  there  very  cheaply  in  great  abundance. 
The  average  price  of  wheat  at  Calcutta  is  less  than  fifty  cents 
a  bushel;  but  the  freight  and  other  charges  of  transporting 


172  INTERNATIONAL   EXCHANGES. 

that  bushel  to  England,  and  selling  it  there,  amount  to  about 
eighty  cents.  England,  therefore,  though  she  has  abolished 
her  corn  laws,  enjoys  a  virtual  protective  duty  against  wheat 
from  India,  amounting  to  one  hundred  and  sixty  per  cent. 
The  cost  of  transporting  English  manufactured  goods  to 
India,  cannot,  on  an  average,  exceed  forty  per  cent,  of  their 
value.  The  difference  between  these  two  rates,  amounting  to 
one  hundred  and  twenty  per  cent.,  is,  of  course,  really  pro- 
hibitive in  its  effects;  and  India  wheat  is  not  brought  to 
England  at  all. 

The  difference  in  the  cost  of  transporting  raw  materials 
and  manufactured  goods  across  the  Atlantic  is  certainly  not 
so  great  as  in  sending  them  round  the  Cape  of  Good  Hope; 
but  it  is  enough  to  give  a  very  important  advantage  to  the 
traffic  to  England.  Our  chief  article  of  export,  raw  cotton, 
is  a  very  bulky  one;  and  even  breadstuff s  and  tobacco  are 
more  expensive,  both  for  land  and  sea  carriage,  than  the 
cheapest  manufactures  of  the  loom.  On  the  very  prin- 
ciples of  free  trade,  which  means  nothing  but  trade  with 
equal  advantages  to  the  two  parties,  we  ought  to  levy  a  con- 
siderable protective  duty,  in  order  to  make  up  the  difference 
in  the  cost  of  transportation. 

I  have  already  alluded  to  the  fact,  that  a  protective  duty, 
being  designed  as  a  check  to  injurious  fluctuations  of  price, 
is  graduated  with  reference  to  the  lowest  price  at  which 
the  foreign  commodity  is  ever  sold,  and  not  with  reference 
to  the  average  price.  Thus  a  duty  of  thirty,  may  not  raise 
the  average  price  more  than  fifteen  per  cent. ;  and  this  last 
may  be  the  whole  amount  of  real  protection  that  the  Amer- 
ican manufacturer  needs.  But  to  secure  this  protection  at 
all  times,  the  duty  must  be  fixed  at  thirty  per  cent.,  because 
circumstances  may  sometimes  force  the  foreign  commodity 
upon  the  market  at  a  price  fifteen  per  cent,  below  its 
ordinary  value.  Thus,  a  temporary  excess  of  production, 
or  the  reaction  after  a  commercial  crisis,  may  flood  the 


INTERNATIONAL   EXCHANGES.  173 

English  market,  for  a  while,  with  manufactured  goods. 
These  must  be  got  rid  of,  even  at  a  great  sacrifice;  and  their 
owners  prefer  to  send  them  abroad  to  be  sold,  rather  than  to 
lower  prices  by  forced  sales  in  the  home  market.  Hence, 
foreigners  can  often  purchase  British  manufactures  at  a  less 
price  than  the  English  themselves.  The  injurious  effect  of 
a  forced  sale  is  thereby  only  transferred  from  the  English 
to  the  American  market.  Prices  here  may  be  depressed  to 
a  ruinous  extent  for  a  time,  only  to  recover  their  former 
level,  or  even  to  rise  above  it,  after  the  mischief  has  been 
done  of  driving  American  manufactures  out  of  the  busi- 
ness. The  proper  object  of  legislation,  in  regard  to  the 
admission  of  imports,  is  to  prevent  injurious  fluctuations  of 
prices. 

The  disturbing  effect  produced  by  a  temporary  glut  of  the 
imported  commodity  may  be  much  larger  than  its  cause 
Would  seem  to  warrant;  for  the  quantity  thus  thrown  upon  the 
market  need  not  be  large.  But,  as  we  have  seen,  taking 
away  a  third  part  of  the  supply  may  either  double  the  price, 
or  fail  to  raise  it  even  one-sixth,  according  as  the  article  is 
one  of  prime  necessity,  or  one  which  people  can  easily  do 
without.  In  like  manner,  making  the  stock  of  goods  on 
hand  one-third  larger  than  usual  may  sink  the  price,  not 
merely  in  proportion  to  that  increase,  but  to  one-half  of  its 
former  amount.  Then  the  whole  stock,  both  foreign  and 
domestic,  must  be  sold  at  this  ruinous  sacrifice. 

"To  give  the  monopoly  of  the  home  market,"  says  Adam 
Smith,  "to  the  produce  of  domestic  industry,  in  any  particu- 
lar art  or  manufacture,  is  in  some  measure  to  direct  private 
people  in  what  manner  they  ought  to  employ  their  capitals, 
and  must,  in  almost  all  cases,  be  either  a  useless  or  hurtful 
regulation.  If  the  produce  of  domestic  can  be  bought  there 
as  cheaply  as  that  of  foreign  industry,  the  regulation  is 
evidently  useless.  If  it  cannot,  it  must  generally  be  hurt- 
ful. It  is  the  maxim  of  every  prudent  master  of  a  family, 


174  INTERNATIONAL    EXCHANGES. 

never  to  attempt  to  make  at  home  what  it  will  cost  him  more 
to  make  than  to  buy.  The  tailor  does  not  attempt  to  make 
his  own  shoes,  but  "buys  them  of  the  shoemaker.  The  shoe- 
maker does  not  attempt  to  make  his  own  clothes,  but 
employs  a  tailor.  What  is  prudence  in  the  conduct  of 
every  private  family,  can  scarce  be  folly  in  that  of  a  great 
kingdom." 

The  comparison  of  individuals  with  communities  is  often 
a  faulty  and  deceptive  one,  and  is  particularly  so  in  this 
case.  Certainly  it  would  be  unwise  in  an  individual  to  be 
his  own  weaver,  tailor,  carpenter,  and  blacksmith;  he  would 
thus  lose  all  the  advantages  of  a  division  of  labor,  and  would 
not  become  skilled  in  any  department.  But  this  objection 
does  not  hold  in  the  case  of  a  community,  which  has  only  a 
fictitious  unity,  and  is  really  made  up  of  many  individuals, 
who  may  distribute  among  themselves  all  the  employments 
which  are  requisite  for  the  production  of  all  the  commodi- 
ties that  the  society  needs.  No  one  person  is  thus  required 
to  practice  more  than  one  art,  and  the  division  of  labor 
among  these  individuals  is  as  perfect  as  if  the  same  number 
of  trades  were  partitioned  out  among  so  many  distinct  com- 
munities. Still  more,  as  communities  are  often  separated 
from  each  other  by  broad  tracts  of  sea  or  land,  should  each 
one  confine  its  industry  to  the  production  of  a  smgle  com- 
modity,  and  purchase  whatever  else  it  needs  from  rival 
States,  all  its  articles  of  consumption,  one  alone  excepted, 
would  come  to  it  burdened  with  a  heavy  cost  of  transporta- 
tion; and  the  sale  of  its  own  single  product  everywhere  but 
at  home  would  be  impeded  by  an  addition  to  its  cost  from 
the  same  cause.  All  the  advantages  of  a  division  of  labor 
result  from  a  separation  of  employments  among  individuals, 
and  become  disadvantages  in  the  case  of  distinct  States, 
counties,  and  even  towns.  To  one  who  is  a  blacksmith,  it  is 
no  help,  but  rather  a  hindrance,  that  his  next-door  neighbor 
is  a  blacksmith  also;  he  has  thus  a  competitor  in  satisfying 


INTERNATIONAL   EXCHANGES.  175 

the  wants  of  his  own  village,  where  every  mechanic  finds 
his  best  and  most  profitable  customers;  and  as  blacksmiths1 
work  is  heavy,  he  cannot  carry  his  wares  for  sale  even  to 
the  next  county  or  town  without  lessening  his  profits. 

The  inhabitants  of  every  country  town  understand  their 
own  interests  much  better  than  Adam  Smith  did.  Instead 
of  forming  themselves  into  a  settlement  composed  exclusively 
of  artisans  of  one  trade,  each  community  has  its  own  mason, 
shoemaker,  carpenter,  shopkeeper,  lawyer,  doctor,  and  clergy- 
man, and  is  thus  not  obliged  to  send  a  dozen  or  twenty  miles 
in  order  to  have  a  horse  shod,  a  chimney  built,  a  tooth 
pulled,  or  a  marriage  celebrated.  A  Yankee  farmer,  with 
half  a  dozen  stout  sons,  acts  upon  the  same  principle,  in  not 
educating  them  all  to  his  own  employment,  but  making  a 
mechanic  of  one,  a  merchant  of  another,  a  sailor  of  a  third, 
sending  a  fourth  to  college,  and  keeping  only  one  at  home 
to  be  his  own  successor  upon  the  farm.  As  all  occupations 
are  precarious,  he  knows  that,  by  this  course,  he  multiplies 
the  chances  of  success,  or  reduces  the  chances  of  failure, 
for  the  whole  family,  besides  suiting  each  member  of  it 
with  an  employment  best  adapted  to  his  peculiar  powers  and 
inclination. 

We  may  ask  if  it  be  not  as  reasonable  for  a  nation,  as  it 
confessedly  is  for  an  individual,  to  enter  upon  a  course  of 
education,  or  serve  an  apprenticeship.  During  the  period  of 
discipline,  the  gains  will  be  small,  the  labor  severe,  and 
perhaps  the  expenses  heavy;  but  an  art  or  handicraft  may 
thus  be  acquired  which  may  afterwards  be  exercised  with 
great  profit.  "We  suppose  that  the  art  is  one  for  which  the 
individual  or  the  nation  is  sufficiently  qualified  by  nature,  so 
that  merely  the  tact  and  dexterity,  which  can  only  be 
acquired  by  practice,  are  wanting.  The  common  answer  to 
this  question,  "that  when  the  proper  time  has  arrived,  and 
sufficient  capital  has  been  accumulated,  manufactures  will 
introduce  themselves  without  the  aid  of  protective  duties," 


176  INTERNATIONAL   EXCHANGES. 

is  evasive  and  insufficient.  It  supposes  that  want  of  capital 
is  the  only  obstacle  to  the  immediate  commencement  of 
manufacturing  enterprises;  whereas  skill  is  also  requisite. 
Capital,  we  admit,  may  be  accumulated  in  agriculture  and 
other  pursuits;  but  skill  can  be  acquired  only  by  actual 
experiments  in  manufacture,  and  those  experiments  can  "be 
tried  only  at  considerable  sacrifice.  Individuals  cannot  be 
expected  to  make  these  sacrifices,  when  the  results  of  the 
experiment,  if  successful,  will  not  accrue  to  their  exclusive 
advantage,  but  will  be  open  to  all. 

Even  in  Great  Britain,  these  principles  are  carried  into 
practical  application,  through  the  encouragement  afforded  to 
authors  and  inventors,  by  securing  to  them,  for  a  limited 
period,  the  exclusive  right  to  sell  their  respective  writings 
and  discoveries.  P.atents  and  copyrights,  which  no  one 
thinks  it  improper  to  grant,  are  signal  instances  of  the  suc- 
cessful application  of  the  principles  of  the  protective  system. 
They  are  strict  monopolies,  no  one  but  che  author  or  inventor 
and  his  agents  being  allowed  to  manufacture  or  sell  the  par- 
ticular book  or  machine  which  is  thus  protected.  Conse- 
quently they  are  prohibitive  rather  than  protective  duties; 
any  price  can  be  set  upon  the  articles  which  the  owner  of 
the  patent  or  copyright  sees  fit  to  demand.  And  the  public 
cheerfully  pay  the  addition  thus  made  to  the  natural  cost  of 
the  commodity,  knowing  that  without  such  encouragement 
few  good  books  would  be  written  and  few  useful  machines 
invented;  and  that  at  the  expiration  of  a  limited  time  the 
right  to  make  and  vend  the  work  will  become  general,  and 
the  community  will  then  be  the  richer  by  the  whole  value  of 
the  original  proprietor's  genius  and  labor. 

The  reasonableness  of  granting  patent  rights  and  copy- 
rights is  frankly  admitted  by  an  able  advocate  of  free  trade, 
Mr.  J.  S.  Mill.  This,  he  says,  is  not  making  the  commodity 
dear  for  the  benefit  of  the  patentee,  but  merely  postponing  a 
part  of  the  increased  cheapness  which  the  public  owe  to  the 


INTERNATIONAL    EXCHANGES.  177 

inventor,  in  order  to  compensate  and  reward  him  for  the  ser- 
vice. Having  conceded  thus  much,  he  finds  himself  obliged, 
by  consistency  of  reasoning,  to  make  the  following  additional 
admission,  which  really  covers  the  whole  ground  usually  claimed 
by  the  advocates  of  a  protective  system  in  the  United  States. 
" The  only  case,"  he  says,  "in  which  on  mere  principles  of 
Political  Economy,  protecting  duties  can  be  defensible,  is 
when  they  are  imposed  temporarily  (especially  in  a  young 
and  rising  nation)  in  hopes  of  naturalizing  a  foreign  indus- 
try in  itself  perfectly  suitable  to  the  circumstances  of  the 
country.  The  superiority  of  one  country  over  another  in  a 
branch  of  production  often  arises  only  from  having  begun  it 
sooner.  There  may  be  no  inherent  advantage  on  one  part,  or 
disadvantage  on  the  other,  but  only  a  present  superiority  of 
acquired  skill  and  experience.  A  country  which  has  this 
skill  and  experience  yet  to  acquire  may  in  other  respects  be. 
better  adapted  to  the  production  than  those  which  were 
earlier  in  the  field;  and  besides,  it  is  a  just  remark  that 
nothing  has  a  greater  tendency  to  promote  improvements  in 
any  branch  of  production  than  its  trial  under  a  new  set  of 
conditions.  But  it  cannot  be  expected  that  individuals 
should,  at  their  own  risk,  or  rather  to  their  certain  loss, 
introduce  a  new  manufacture  and  bear  the  burden  of  carry- 
ing it  on  until  the  producers  have  been  educated  up  the  level 
of  those  with  whom  the  processes  are  traditional.  A  pro- 
tecting duty,  continued  for  a  reasonable  time,  will  sometimes 
be  the  least  inconvenient  mode  in  which  the  nation  can  tax 
itself  for  the  support  of  such  an  experiment." 

But  on  this  great  question  between  free  trade  and  a  pro- 
tective policy,  these  arguments  relating  only  to  pecuniary 
loss  or  gain  are  not  so  weighty  as  the  considerations,  previ- 
ously adduced,  respecting  the  devotion  of  the  greater  pa,rt 
of  the  people  to  skilled  or  rude  labor,  and  their  consequent 
collection  in  towns  and  cities,  or  wide  dispersion  over  the 
face  of  the  country.  Viewed  in  this  light,  I  confess  the 


178  INTERNATIONAL    EXCHANGES. 

question  seems  to  be  one  between  progress  in  civilization  and 
the  arts,  or  a  gradual  return,  I  will  not  say  to  barbarism,  but 
to  that  very  imperfect  stage  of  civilization  which  exists  in  all 
countries  where  the  population  are  almost  exclusively  devoted 
to  agriculture.  The  best  legislative  policy  is  that  which  will 
most  effectually  develop  all  the  natural  advantages  of  a 
country,  whether  mental  or  material.  It  is  as  wasteful,  to 
say  the  least,  to  allow  mechanical  skill  and  inventive  genius 
to  remain  unemployed  as  it  would  be  to  permit  water-power 
to  run  without  turning  mills,  or  mineral  wealth  to  continue 
in  the  ore,  or  forests,  to  wavs  where  cotton  and  grain  might 
grow  luxuriantly.  If  the  rude  labor  of  husbandry  is  to 
form  the  principal  employment  of  the  people,  the  higher 
remuneration  of  skilled  labor  in  the  arts  must  be  sacrificed; 
and  this  would  be  as  bad  economy  as  to  turn  our  richest 
soils  into  sheep-pastures,  or  to  feed  cattle  upon  the  finest 
wheat.  The  dispersion  of  the  inhabitants  over  vast  tracts  of 
territory  in  the  isolated  pursuits  of  agriculture,  the  great 
majority  of  them  being  doomed  to  work  which  would  not 
tax  the  mental  resources  of  a  Feejee-Islander,  must  bo  fatal 
not  only  to  the  growth  of  wealth,  but  to  many  of  the  higher 
interests  of  humanity.  The  hardships  and  privations  of  a 
life  in  the  backwoods  are  a  fearful  drawback  upon  that 
bounty  which  confers,  as  a  free  gift,  a  homestead  farm  with 
a  soil  that  reproduces  the  seed  a  hundred-fold.  To  give  full 
scope  to  all  the  varieties  of  taste,  genius,  and  temperament; 
to  foster  inventive  talent;  to  afford  adequate  encouragement 
to  all  the  arts,  whether  mechanical  or  those  which  are  usually 
distinguished  as  the  fine  arts;  to  concentrate  the  people,  or 
to  bring  as  large  a  portion  of  them  as  possible  within  the 
sphere  of  the  humanizing  influences,  and  larger  means  of 
mental  culture  and  social  improvement,  which  can  be  found 
only  in  cities  and  large  towns, — these  are  objects  which 
deserve  at  least  as  much  attention  as  the  inquiry  where  we 
can  purchase  calicoes  cheapest,  or  how  great  pecuniary  sacri- 


INTERNATIONAL   EXCHANGES.  179 

fice  must  be  made  before  we  can  manufacture  railroad  iron 
for  ourselves.  I  see  not  how  these  ends  can  be  obtained  in 
a  country  like  ours,  which  is,  so  to  speak,  cursed  with  great 
advantages  for  agriculture,  emigration,  and  the  segregation 
of  the  people  from  each  other,  without  throwing  over  our 
manufacturing  industry,  at  least  for  half  a  century  longer 
the  broad  shield  of  an  effective  protecting  tariff.  When  wt» 
have  enjoyed,  as  England  has  already  enjoyed,  the  benefit  of 
a  strict  protective  policy  for  over  a  century,  for  the  purpose 
of  completing  our  education  in  manufactures,  then  we  snaM 
be  ready  to  do  what  England  at  last  has  done, — to  throw 
down  all  barriers,  and  to  invite  the  world  to  compete  with 
us  in  the  application  of  industry  and  skill  to  any  enterprise 
designed  to  satisfy  the  wants  of  man. 


CHAPTER  XI. 

FREE  TRADE. 

BY    RlCHAKD    COBDEN,   M.   P. 


AYLESBURY,  January  9,  1853. 

IT  gives  me  particular  pleasure  to  follow  a  gentleman  who- 
has  addressed  you  in  the  capacity  of  a  tenant-farmer,  one 
who,  to  my  knowledge,  in  his  own  business,  by  the  growth 
of  more  corn,  and  raising  more  cattle,  and  employing  more 
labor  to  a  given  area  of  soil,  excels  most  of  his  neighbors — 
a  man  so  well  entitled  to  speak  to  you  on  the  subject  of  the 
interests  of  the  agriculturists  of  this  country.  We  are  met 
here  under  the  denomination  of  a  reform  meeting — a  parlia- 
mentary and  financial  reform  meeting  ;  but  it  will  be  known 
to  every  one  present  that  the  general  impression,  both  here 
and  abroad,  is,  that  this  is  a  meeting  for  the  purpose,  so  far 
as  I  am  concerned  in  the  matter,  of  discussing  the  question 
of  protection  or  free  trade,  especially  with  reference  to 
tenant-farmers'  interests  in  this  matter.  I  remember  speak- 
ing to  an  audience  in  this  hall  six  years  ago,  and  on  that 
occasion  going  through  the  arguments  necessary  to  show 
that  the  corn  law  was  founded  upon  impolicy  and  injustice  ; 
I  remember  on  that  occasion  maintaining  the  proposition 
that  the  corn  law  had  not  proved  beneficial  to  any  class  of 
the  community,  and  I  ventured  to  say  that  the  country  would 
be  more  prosperous  without  the  system  of  agricultural  pro- 
tection  than  it  had  been  with  it.  "Well,  I  am  here  now  to 
maintain  that  by  every  test  which  can  proclaim  the  prosperity 

(180) 


FREE    TRADE.  181 


or  adversity  of  a  nation,  we  stand  better  now  without  the 
corn  law  than  we  did  when  we  had  it.  [Cheers,  and  some 
cries  of  "  No."]  I  am  rather  glad  to  see  that  there  are  some 
dissentients  from  that  proposition  ;  our  opponents  will  not 
say  that  this  is  a  packed  meeting.  We  have  got  some  pro- 
tectionists here.  And  now,  if  you  will  only  just  keep  that 
order  which  is  necessary  for  any  rational  proceedings,  I  will 
endeavor  to  make  you  free  traders  before  you  leave. 

I  have  said  that,  by  every  test  which  can  decide  the 
question  of  national  prosperity  or  national  adversity,  we 
stand  in  a  better  position  than  we  did  when  we  had  the 
corn  law.  What  are  the  tests  of  a  nation's  prosperity  ?  A 
declining  or  an  improving  revenue  is  one  test.  Well,  our 
revenue  is  better  than  it  was  under  a  corn  law.  Our  exports 
and  our  imports  are  better  than  they  were  under  the  corn 
law.  Take  the  question  of  pauperism.  I  will  not  shrink 
even  from  the  test  of  pauperism  in  the  agricultural  districts; 
I  have  the  statistics  of  many  of  your  unions  in  Buckingham- 
shire and  Bedfordshire,  and  I  warn  the  protectionist  orators, 
who  are  going  about  persuading  themselves  that  they  have 
a  case  in  the  matter  of  pauperism,  that  when  Parliament 
meets,  and  Mr.  Baines  is  enabled  to  bring  forward  the  poor- 
law  statistics  up  to  the  last  week  (not  going  to  the  "blue 
books,"  and  bringing  forward  the  accounts  of  the  previous 
year),  I  warn  the  protectionists  that,  with  regard  to  the  test 
of  pauperism,  even  in  the  agricultural  districts,  it  will  be 
seen  that  things  are  more  favorable  now,  with  bread  at  a 
moderate  price,  than  they  were  in  1847,  when  prices  were 
to  their  hearts'  content,  and  the  loaf  was  nearly  double  the 
price  it  is  now.  Take  the  state  of  wages  ;  that  is  a  test  of 
the  condition  of  the  people.  What  are  the  people  earning 
now,  compared  with  1847,  when  the  protectionists  were  so 
well  satisfied  with  their  high  prices  ?  Why,  as  a  rule, 
throughout  the  country,  there  is  more  money  earned  now 
than  there  was  then  ;  and  they  are  getting  the  comforts  and 


182  FREE    TRADE. 


necessaries  of  life  in  many  cases  at  two-thirds,  and  in  some 
cases  at  less  than  that,  of  the  prices  of  1847.  [A  voice  : 
"It  is  not  so  with  the  agricultural  laborers."]  I  will  come  to 
them  by-and-by.  What  I  want  you  to  agree  with  in  the 
outset  is  that  your  laborers  are  not  the  nation  ;  and  if  your 
agriculture  be  an  exception  to  the  rule,  we  must  find  out 
the  reason  why  it  is  so  ;  we  will  come  to  that  by-and-by. 

I  remember  quite  well,  when  1  came  here  to  see  you 
before,  how  my  ears  used  to  be  dinned  by  the  argument  that 
if  we  had  free  trade  in  corn,  the  gold  would  all  be  drained 
out  of  this  country,  for  that  you  could  not  bring  in  5,000,000 
quarters  of  grain  without  being  drained  of  your  gold  ;  that 
the  foreigner  would  not  take  anything  else  in  exchange. 
Why.  we  have  had  between  30,000,000  and  40,000,000 
quarters  within  these  last  four  years,  and  the  bank  of  Eng- 
land was  never  so  encumbered  with  gold  as  it  is  now.  I  have 
spoken  of  wages,  and  I  say  that  in  every  branch  of  industry 
the  rate  of  wages  has  improved.  You  may  say  that  agricul- 
ture is  an  exception.  We  will  come  to  that,  but  I  do  not 
make  an  exception  in  favor  of  any  trade  in  your  district  ;  I 
do  not  make  an  exception  in  the  case  of  the  employment  of 
women  in  your  district,  for  1  have  made  particular  inquiry, 
and  I  find,  even  in  the  article  of  straw-plaiting,  that  families 
who  could  not  earn  15s.  in  1847,  are  now  earning  25,9. 
["No,"  and  some  confusion.]  I  say  families.  I  know  we 
have  some  of  the  most  extensive  manufacturers  in  this  hall. 
Then  there  is  the  lace  trade,  the  pillow-lace  trade,  employing 
a  great  number  of  women  in  Buckinghamshire.  [Renewed 
confusion,  owing  to  a  gentleman  pressing  his  way  towards 
the  platform.  A  voice  :  "  He  is  a  reporter."]  Well,  we  are 
delighted  to  see  the  gentlemen  of  the  press  ;  the  more  of 
them  the  better ;  what  we  say  here  will  be  read  elsewhere, 
and  we  speak  for  that  purpose.  I  was  about  saying,  that 
even  the  wages  of  the  pillow-lace  makers  have  advanced, 
and  they  are  getting  their  bread  at  two-thirds  the  former 


FREE   TRADE.  183 


price.  Even  the  poor  chair-makers  of  this  and  the  adjoining 
county — a  trade  that  has  hardly  known  what  it  was  to  have 
a  revival — are  getting  better.  I  repeat  it,  there  is  not  an 
exception  of  any  trade  in  which  there  is  not  an  advantage 
gained  by  the  moderate  price  of  food  that  now  prevails. 
["Not  the  lace-makers  ?"]  They  are  getting  more  employ- 
ment. 

But  I  want  now  to  come  to  the  question  which  interests 
you  in  this  immediate  neighborhood.  If  every  other  great 
interest  of  the  State  is  thriving — and  no  one  can  deny  it — 
how  is  it  that  agriculture  is  depressed  ?  how  is  it  that  the 
interests  of  agriculture  are  found  in  antagonism  with  the 
interests  of  the  rest  of  the  community  ?  Why,  these  people 
have  been  proceeding  upon  a  false  system,  they  have  been 
upon  an  unsound  basis  ;  they  have  been  reckoning  upon  Act 
of  Parliament  prices  ;  they  have  made  their  calculations 
upon  Act  of  Parliament  prices,  and  now  they  find  they  are 
obliged,  like  other  individuals,  to  be  content  with  natural 
prices.  What  is  the  reason  that  agriculture  cannot  thrive 
as  well  as  other  trades  ?  We  find  meetings  called,  purport- 
ing to  be  meetings  of  farmers,  complaining  of  distress  ;  and 
what  is  their  remedy  for  that  distress  ?  Is  it  to  go  and  talk 
like  men  of  business  to  their  landlords,  and  ask  them  for 
fresh  terms  of  agreement,  fresh  arrangements,  that  they 
may  have  the  raw  material  of  their  trade — the  land — at  the 
natural  price,  and  free  from  those  absurd  restrictioDS  that 
prevent  their  giving  the  natural  value  to  it  ?  No.  Go  to  a 
meeting  where  there  is  a  landlord  in  the  chair,  or  a  land- 
agent — his  better-half, — and  you  find  them  talking,  but  never 
as  landlords  and  land-agents,  but  as  farmers,  and  for  farm- 
ers.  And  what  do  they  say  ?  Why,  they  say,  "  We  must 
go  to  Parliament,  and  get  an  Act  of  Parliament  to  raise  the 
price  of  corn,  that  you  may  be  able  to  pay  us  your  rents." 
That  is  what  it  amounts  to. 

Now,  what  ought  to  be  the  plan  pursued  by  the  landlord 


184  FREE   TRADE. 


ahd  tenant  on  an  occasion  like  this?  The  landlord,  as  Mr. 
Disraeli  very  properly  observed  yesterday  at  Great  Marlow, 
is  an  individual  who  has  land,  which  is  a  raw  material,  and 
nothing  more,  to  dispose  of;  and  the  farmer  is  a  capitalist, 
who  offers  to  take  this  raw  material,  in  order  that  he  may 
work  it  up  and  make  a  profit  by  it;  in  fact,  the  farmer  and 
the  landlord  stand  in  precisely  the  same  position  that  the 
cotton-spinner  and  the  cotton -merchant  stand  in.  The  cot- 
ton-spinner buys  his  cotton  wool  from  the  cotton-merchant, 
in  order  that  he  may  spin  it  up  at  a  profit.  If  he  can  get 
his  raw  material  cheap,  he  can  make  a  profit;  and  if  not,  he 
cannot.  But  we  never  hear  of  the  cotton-spinner  and  the 
merchant  going  together  to  Parliament  for  a  law  to  keep  up 
the  price  of  cotton.  I  declare,  when  I  find  landlord  and 
tenant  running  about  raising  a  cry  for  "protection,"  and 
going  to  Parliament  for  a  law  to  benefit  them  by  raising 
the  price  of  corn,  I  cannot  help  feeling  humiliated  at  the 
spectacle,  because  it  is  a  proof  of  want  of  intelligence  on 
the  one  side,  and,  I  fear,  want  of  honesty,  too,  on  the  other. 
Now,  suppose  you  were  to  see  a  crowd  of  people  running 
up  and  down  the  streets  of  Aylesbury,  shouting  out,  "  Pro- 
tection! protection!  oh,  give  us  protection!  we  are  all  row- 
ing in  the  same  boat! "  and  when  you  inquired  who  these 
people  were,  you  were  told  they  were  the  grocers  of  Ayles- 
bury and  their  customers,  who  were  crying  out  for  a  law 
which  would  raise  the  price  of  all  the  hogsheads  of  sugar  in 
the  grocers'  stores, — would  you  not  say  that  this  was  a  very 
curious  combination  of  the  grocers  and  their  customers? 
"Would  not  you  say  that  the  interest  of  the  men  who  had 
the  hogsheads  of  sugar  to  sell,  and  who  wished  therefore  to 
raise  the  price,  could  not  be  identical  with  that  of  the  men 
who  had  to  buy  the  sugar?  Yet,  that  is  precisely  the  posi- 
tion in  which  the  tenant  farmers  and  the  land  owners  stand. 
[Cries  of  "No,  no,"  and  "'Yes.'1]  Well,  will  any  gentleman 
rise  on  this  platform,  and  explain  v/here  I  am  wrong?  Now, 


FREE   TRADE.  185 


the  plan  I  would  recommend  the  tenant  farmers  and  the 
land  holders  to  pursue  is  precisely  the  plan  which  has  been 
adopted  by  my  own  tenants  and  myself.  I  will  explain  how 
I  acted  in  this  matter.  I  promised  I  would  explain  my  con- 
duct, and  I  will  do  so;  and  if  those  newspapers  that  write 
for  protectionist  farmers  report  nothing  else  of  what  I  may 
say  to-night,  I  beg  them  to  let  their  farming  readers  know 
what  I  am  now  going  to  say.  [A  voice:  "How  large  are 
your  farms? "]  I  will  tell  you  all  about  it.  I  happen  to 
stand  here  in  the  quality  of  a  landlord,  filling,  as  I  avowed 
to  you  at  the  beginning,  a  most  insignificant  situation  in 
that  character. 

I  possess  a  small  estate  in  West  Sussex,  of  about  140 
acres  in  extent,  and  a  considerable  part  of  it  in  wood.  It 
is  situated  in  a  purely  farming  district,  in  the  midst  of  the 
largest  protectionist  proprietors  in  Sussex;  the  land  is  infe- 
rior; it  has  no  advantages;  it  is  nearly  ten  miles  distant 
from  a  railroad;  it  has  no  chimneys  or  growing  manufactur- 
ing towns  to  give  it  value.  Now  this  is  precisely  the  kind 
of  land  which  we  have  been  told  again  and  again  by  Lord 
John  Manners,  the  Marquis  of  Granby,  and  other  protectionist 
landlords,  cannot  be  cultivated  at  all  with  wheat  at  40s., 
even  if  it  were  given  to  the  cultivator  rent  free.  This  prop- 
erty came  into  my  possession  in  1847.  [A  Voice:  "You 
got  it  from  the  League  funds."]  Yes;  I  am  indebted  for 
that  estate,  and  I  am  proud  here  to  acknowledge  it,  to  the 
bounty  of  my  countrymen.  That  estate  was  the  scene  of 
my  birth  and  of  my  infancy;  it  was  the  property  of  my 
ancestors;  it  is  by  the  munificence  of  my  countrymen  that 
this  small  estate,  which  had  been  alienated  by  my  father 
from  necessity,  has  again  come  into  my  hands,  and  that  I 
am  enabled  to  light  up  again  the  hearth  of  my  fathers;  and 
I  say  that  there  is  no  warrior  duke  who  owns  a  vast  domain 
by  the  vote  of  the  imperial  Parliament  who  holds  his  prop- 


186  FREE   TRADE. 


erty  by  a  more  honorable  title  than  that  by  which  I  possess 
mine. 

My  first  visit  to  this  property,  after  it  came  into  my 
possession,  was  in  1848.  At  that  time,  as  you  are  aware, 
prices  ranged  high  in  this  country;  but  never  expecting 
those  prices  would  continue,  I  thought  that  the  proper  time 
for  every  man  having  an  interest  in  the  land  to  prepare  for 
the  coming  competition  with  the  foreigner.  I  gave  orders 
that  every  hedge-row  tree  upon  my  estate  should  be  cut 
down  and  removed.  I  authorized  the  two  occupying  ten- 
ants upon  the  property  to  remove  every  fence  upon  the 
estate,  or,  if  they  liked,  to  grub  up  only  a  portion  of  them ; 
but  I  distinctly  said  I  would  rather  not  see  a  hedge  remain- 
ing on  the  property,  inasmuch  as  it  was  surrounded  with 
woods,  and  I  did  not  think  fences  were  necessary.  That 
portion  of  the  land  which  required  draining,  I  had  instantly 
drained  at  my  own  cost.  The  estate,  as  I  have  said,  was 
situated  in  the  midst  of  large  protectionist  land-owners, 
who,  as  a  matter  of  course,  were  great  game  preservers; 
and  it  had  therefore  been  particularly  infested  with  hares 
and  rabbits.  I  authorized  the  tenants  on  my  land  to  kill 
the  rabbits  and  hares,  and  to  empower  any  one  else  they 
pleased  to  kill  them. 

So  troublesome  had  been  the  hares  and  rabbits  on  that 
little  property,  that  they  even  entered  the  gardens  and 
allotments  of  the  laborers;  and  one  of  those  laborers  ap- 
peared before  the  Committee  of  the  House  of  Commons  on 
the  Game-laws  in  1845,  and  stated  that  the  rabbits  had  not 
only  devoured  his  vegetables,  his  cabbages,  and  his  peas,  but 
had  actually  dug  up  his  potatoes?  At  that  time — in  1845 — 
the  property  did  not  belong  to  me;  but  I  took  care  to  explain 
to  this  worthy  man,  in  1848,  when  I  visited  the  estate,  that 
if  the  hares  or  rabbits  ever  trouble  him,  or  the  other  labor- 
ers living  upon  my  property,  that  under  the  present  law  any 


FREE    TRADE.  187 


man  may  destroy  hares  on  his  own  holding  without  taking 
out  a  license,  and  I  advised  the  laborers  to  set  gins  and 
snares  upon  their  allotments  and  in  their  gardens,  to  catch 
all  the  hares  and  rabbits  they  could;  and  when  they  caught 
them,  to  be  sure  and  put  them  in  their  own  pots  and  eat 
them  themselves.  That  is  the  way  in  which  I  dealt  with  the 
game  on  my  property.  I  must  confess  that  I  have  no  taste 
whatever  for  the  preservation  of  such  vermin,  which  I 
believe  to  be  utterly  inconsistent  with  good  farming,  and 
the  greatest  obstacle  to  the  employment  of  the  laborers. 
For  my  own  part  I  would  rather  see  a  good  fat  hog  in  every 
sty  belonging  to  my  laborers,  than  have  the  best  game  pre- 
serve in  the  country. 

That,  then,  was  the  course  which  I  took  in  1848,  to  pre- 
pare for  the  coming  competition  with  the  foreigner.  It  was 
a  time  when  prices  ranged  high ;  nothing  was  settled  about 
rents.  In  the  course  of  the  last  year,  however,  I  received  a 
letter  from  one  of  my  tenants,  saying,  u  When  I  took  this 
land  from  your  predecessor,  it  was  upon  the  calculation  of 
wheat  being  at  565.  a  quarter;  it  is  now  little  more  than 
405.,  and  I  should  like  to  have  a  new  arrangement  made." 
I  wrote  in  reply,  "  The  proposition  you  make  is  reasonable. 
We  will  have  a  new  bargain.  I  am  willing  to  enter  upon 
an  arrangement,  estimating  the  future  price  of  wheat  at  40s. ; 
but  whilst  I  am  willing  to  take  all  the  disadvantages  of  low 
prices,  I  must  have  the  benefit  of  good  cultivation,  and 
therefore  we  will  estimate  the  produce  of  the  land  to  be 
such  as  could  be  grown  by  good  farmers  upon  the  same 
quality  of  soil.1'  Now,  from  the  moment  that  this  reasona- 
ble proposition  was  made,  there  was  not  the  slightest  anxiety 
of  mind  on  the  part  of  my  tenants — not  the  least  difficulty 
in  carrying  on  their  business  of  farming  under  a  system  of 
free  trade  as  well  as  they  had  done  under  the  system  of  pro- 
tection. From  that  moment  the  fao-^on  this  small 


„.    THf. 

,  UNIVEBSIT1 

r*  A 


188  FREE   TRADE. 


property  felt  themselves  no  longer  interested  in  the  matter 
of  free  trade  and  protection;  and  the  laborers  felt  that  they 
had  as  good  a  prospect  of  employment  as  they  had  before, 
and  they  had  no  interest  in  the  question  of  protection.  We 
settled  our  terms.  I  have  bargained  for  my  rent.  It  is  no 
business  of  the  public  what  rent  I  get.  That  is  my  business, 
and  the  business  of  the  farmers;  but  if  it  is  any  satisfaction 
to  my  protectionist  friends,  I  will  admit  that  I  am  receiving 
a  reduced  rent,  notwithstanding  that  I  have  drained  the 
land,  and  given  them  the  game,  and  removed  the  hedges, 
and  cleared  away  every  hedge -row  tree. 

What,  then,  becomes  of  the  argument  that  it  is  impossible 
to  carry  on  agriculture  in  this  country  with  wheat  at  40s.  a 
quarter  ?  I  am  getting  some  rent — and  not  so  very  large  a 
reduction  from  the  rent  I  got  before;  and  it  is  enough  for 
me  to  say  that  the  land  is  being  cultivated,  and  that  farmers 
and  laborers  are  employed  and  contented. 

Now,  with  regard  to  a  lease,  I  said  to  both  my  tenants, 
4f  Either  take  the  land  from  year  to  year,  with  an  agreement 
binding  each  of  us  to  submit  to  arbitration  the  valuation  of 
unexhausted  improvements  when  you  leave  the  land;  or,  if 
you  like,  take  a  lease,  and  I  will  bind  you  down  to  no  cove- 
nants as  to  the  way  in  which  you  are  to  cultivate  the  land 
while  you  possess  it."  What  possible  excuse,  then,  can  the 
landowners  in  any  part  of  the  country  have  for  coming  for. 
ward  and  telling  us  that  land  cannot  be  cultivated  because 
wheat  is  405.  a  quarter  ?  The  answer  I  intend  to  give  to 
those  noble  dukes  and  lords  who  are  running  about  the 
country,  and  who  are  so  angry  with  me,  and  are  scolding  me 
so  lustily,  is  this — u  Let  me  have  the  arranging  of  the  affairs 
between  you  and  your  tenants, — the  terms,  the  rent,  and 
condition  of  the  holdings, — and  I  will  undertake  to  insure 
that  your  land  shall  be  cultivated  better  than  it  was  before, 
that  farming  shall  be  as  profitable  to  the  farmer,  that  the 


FREE    TRADE.  189 


laborer  shall  have  as  full  employment,  and  at  as  good  wages, 
provided  you  allow  me  to  enter  into  the  same  arrangement 
that  I  have  made  with  my  own  tenants."  But  that  would 
not  suit  these  parties.  It  would  make  a  dry,  dull,  unprofita- 
ble matter  of  business  of  what  is  now  made  a  piece  of  agita- 
tion, which  ought  to  be  called  moonshine. 

Now,  if  I  had  been  a  protectionist,  I  might  have  made 
money  by  this.  I  will  show  you  how  1  should  have  done  so. 
When  my  tenants  wrote  to  me  to  say  there  ought  to  be  a 
fresh  agreement  between  us,  what  would  have  been  my 
answer  had  I  been  a  protectionist  ?  I  should  have  said, 
"That  is  true,  my  good  friends;  we  will  have  a  meeting  at 
Great  Marlow  or  High  Wycombe,  and  we  will  petition  Par- 
liament to  pass  a  law  to  protect  you."  Well,  we  should  have 
had  a  meeting,  my  tenants  would  have  been  invited  to  attend, 
and  would  have  shouted,  "  We  are  rowing  in  the  same  boat!  " 
and  after  two  or  three  hours  of  dull  speeches,  you  would  have 
had  a  conclusion  with  "  three  groans  for  Cobden."  After  this 
meeting  was  over  my  tenants  might  have  gone  home,  and 
might  have  been  prepared,  until  the  next  audit,  to  pay  their 
full  rents  as  before.  And  if  I  were  a  protectionist  landowner 
1  should  have  then  wanted  some  fresh  excuse  against  the 
next  audit-day.  Consequently  I  should  probably  have  told 
the  farmers  to  come  to  the  next  meeting,  at  17  Old  Bond- 
street,  to  memorialize  her  Majesty, — for  they  were  not  to  be 
told  to  petition  the  House  of  Commons,  but  to  lay  their  com- 
plaints  at  the  foot  of  the  throne.  After  my  poor  tenants 
had  done  all  this  and  had  gone  home,  and  prepared  their 
rents  for  the  next  audit-day,  then  some  fresh  excuse  must 
be  found,  and  we  might  have  told  the  farmers  that  instead 
of  memorializing  the  Queen  they  should  agitate  for  a  disso- 
lution of  Parliament.  In  this  case  we  should  have  been  safe 
in  respect  to  our  rents  for  the  next  three  years,  because  that 
is  an  agitation  which  would  last  such  a  period. 


190  FREE    TRADE. 


In  the  mean  time  what  would  be  the  consequence  to  my 
tenants  ?  With  heartsickening  delay,  and  with  the  hopeless- 
ness inspired  into  their  souls  by  these  dreary,  dull,  protec- 
tionist speeches,  telling  them  that  they  could  not  cultivate 
their  land  even  if  no  rent  were  paid;  and  with  the  constant 
drain  on  their  resources  to  pay  their  old  rents,  without 
amelioration  in  their  holdings,  one-half  the  tenants  might  be 
ruined,  and  I  am  not  sure  that  a  large  proportion  will  not  be 
ruined  by  the  tactics  of  the  protectionists  at  the  present 
moment.  But  was  it  necessary  for  any  farmer  to  be  ruined 
if  the  landlords  pursued  the  same  system  as  myself  ?  This 
is  simply  and  purely  a  rent  question.  And  if  the  farmers 
cannot  carry  on  their  business,  it  is  because  they  pay  too 
high  a  rent  in  proportion  to  the  amount  of  their  produce.  I 
do  not  say  that  in  many  cases  the  rents  of  the  landlords 
might  not  be  excessive,  provided  the  land  were  cultivated  to 
its  full  capacity.  But  that  cannot  be  done  without  sufficient 
capital,  and  that  sufficient  capital  cannot  be  applied  without 
sufficient  security,  or  without  a  tenant-right,  or  a  lease 
amounting  to  tenant-right.  "We  want  to  bring  the  land- 
owner and  the  tenant  together,  to  confront  them  in  their 
separate  capacity  as  buyers  and  sellers;  so  that  they  might 
deal  together  as  other  men  of  business,  and  not  allow  them- 
selves to  play  this  comedy  of  farmers  and  landlords  crying 
about  for  protection,  and  saying  that  they  are  rowing  in  the 
same  boat;  when,  in  fact,  they  are  rowing  in  two  boats,  and 
in  opposite  directions. 

There  is  a  new  red-herring  thrown  across  the  scent  of  the 
farmers;  they  are  told  that  protection  cannot  be  had  just 
now;  but  in  the  mean  time  they  must  have  half  the  amount 
of  the  local  rates  thrown  on  the  Consolidated  Fund.  I  am 
really  astonished  that  anybody  should  have  the  assurance  to 
get  up,  and,  facing  a  body  of  tenant  farmers,  make  such  a 
proposal  to  them  for  the  benefit  of  the  landowners.  The 


FREE    TRADE.  11)1 


local  rates  at  present  are  paid  on  ib.e  real  property  of  the 
country.  Such  is  the  nature  of  the  poor-rates  and  of  the 
county -rates,  etc.  They  are  not  assessed  on  the  tenant's  cap 
ital.  ["Hear,"  and  aery,  "Mr.  Lattimore  said  they  are.''] 
He  said  no  such  thing.  [Some  expressions  of  dissent.]  He 
did  not  say  that  the  assessment  was  on  the  ploughs  and  oxen 
of  the  tenantry.  It  is  on  the  rent  of  land,  and  not  on  the 
floating  capital ;  for  it  is  known  to  everybody  that  the  assess- 
ment is  on  the  rent,  and,  if  the  rate  is  assessed  on  the  rent, 
why,  the  tenant  charges  it  to  the  landlord  when  he  takes  his 
farm.  He  calculates  what  the  rates  and  taxes  are,  and,  if 
the  farm  is  highly  rated,  he  pays  less  rent.  Did  you  ever 
know  a  landlord  let  his  land  tithe  free  on  the  same  terms  as 
land  which  had  the  tithe  on  it  ?  At  present  the  rates  were 
laid  on  the  rent  of  land,  and  were  ultimately  paid  by  the 
landlord.  I  admit  that  at  first  the  tenant  pays  it  out  of  his 
pocket,  but  he  gets  it  again  when  he  pays  his  rent.  But 
only  think  of  this  wise  proposal  of  the  farmers*  friend,  who 
says,  "  in  order  to  relieve  you  tenant  farmers,  I  will  take 
one-half  of  these  £12,000,000  of  local  taxes  off,  and  put  it  on 
the  Consolidated  Fund — that  is  to  say,  on  tea,  sugar,  coffee, 
tobacco,  and  other  articles  which  you  tenant-farmers  and 
laborers  consume.'*  There  is  a  pretty  project  for  benefiting 
the  tenant  farmers ! 

But  there  is  another  scheme;  there  are  two  ways  of  doing 
this.  The  other  way  is  by  assessing  the  rates  on  the  floating 
capital  of  the  country.  The  argument  is — why  should  not 
the  shop-keepers,  the  bankers,  and  the  fundholders  be 
}  assessed  ?  But  if  you  allow  the  bringing  in  of  stock-in-trade 
to  be  assessed,  you  must  bring  in  the  farmers'  stock-in-trade 
to  be  assessed.  I  now  ask  the  farmers  in  Aylesbury  and  its 
neighborhood  what  they  would  gain  if  the  value  of  all  stock 
held  upon  land  within  the  neighborhood  of  Aylesbury  were 
assessed  ?  Has  not  Mr.  Lattimore  told  you  that  the  estimated 


192  FREE   TRADE. 


value  of  the  farming  stock  of  this  kingdom  is  £250,000,000  ? 
then  I  can  only  say  it  is  five  times  as  much  as  the  capital 
invested  in  the  cotton  trade,  and  more  than  that  employed  in 
the  great  staple  manufactures  together;  and  under  such  cir- 
cumstances, how  can  those  landlords  tell  the  farmers  that 
they  would  put  rates  on  the  floating  stock  ?  And  is  it  not, 
then,  a  wise  proposal  to  make  to  the  farmers,  to  take  off  half 
of  the  rates,  and  to  put  the  assessment  on  the  floating  capi- 
tal,  of  which  the  farmer  possesses  the  greater  proportion  ? 
I  am  humiliated  when  I  read  of  these  meetings,  in  which  the 
farmers  listen  and  gape  at  such  speeches;  and  I  feel  a  reliei 
that  it  is  not  my  duty  to  attend  at  such  meetings,  and  that  I 
have  no  landlord  to  oblige  by  being  present  at  these 
meetings. 


CHAPTER  XII. 

WEBSTER'S   CHANGE  OP  VIEWS. 

SPEECK   OF   MR.    WEBSTER    OF    MASSACHUSETTS,    ON    THE    TARIFF, 
IN    THE    SENATE,    JULY    25    AND    27,    1846. 


AND  now,  sir,  with  the  leave  of  the  Senate,  I  shall 
proceed  to  consider  the  effects  of  this  bill  upon  some 
of  those  interests  which  have  been  regarded  as  protected 
interests. 

I  shall  not  argue  at  length  the  question  whether  the  gov- 
ernment has  committed  itself  to  maintain  interests  that 
have  grown  up  under  laws  such  as  have  been  passed  for 
thirty  years  back.  I  will  not  argue  the  question,  whether, 
looking  to  the  policy  indicated  by  the  laws  of  1789,  1817, 
1824,  1828,  1832,  and  1842,  there  has  been  ground  for  the 
industrious  and  enterprising  people  of  the  United  States, 
engaged  in  home  pursuits,  to  expect  protection  from  the  gov- 
ernment for  internal  industry.  The  question  is,  do  these  laws 
or  do  they  not,  from  1789,  till  the  present  time,  constantly 
show  and  preserve  a  purpose,  a  policy,  which  might  natur- 
ally and  really  induce  men  to  invest  property  in  manufactur- 
ing undertakings  and  commit  themselves  to  these  pursuits 
in  life?  Without  lengthened  arguments,  I  shall  take  this 
for  granted. 

But,  sir,  before  I  proceed  further  with  this  part  of  the 

case,  I  will  take  notice  of  what  appears  to  be  some  attempt, 

latterly,  by  the  republication  of   opinions  and  expressions, 

arguments   and  speeches  of  mine,  at  an  earlier  and  later 

9  (193) 


194  WEBSTER'S  CHANGE  OF  VIEWS. 

period  of  life,  to  place  me  in  a  condition  of  inconsistency, 
on  this  subject  of  the  protective  policy  of  the  country.  Mr. 
President,  if  it  be  an  inconsistency  to  hold  an  opinion  upon 
a  subject  of  public  policy  to-day,  in  one  state  of  circum- 
stances, and  to  hold  a  different  opinion  upon  the  same 
subject  of  public  policy  to-morrow,  in  a  different  state  of 
circumstances,  if  that  be  an  inconsistency,  I  admit  its 
applicability  to  myself.  Nay,  sir,  I  will  go  further,  and 
in  regard  to  questions  which,  from  their  nature,  do  not 
depend  upon  circumstances  for  their  true  and  just  solution, 
—  I  mean  constitutional  questions,  —  if  it  be  an  inconsis- 
tency to  hold  an  opinion  to-day,  even  upon  such  a  question, 
and  on  that  same  question  to  hold  a  different  opinion  a 
quarter  of  a  century  afterwards,  upon  a  more  comprehen- 
sive view  of  the  whole  subject,  with  a  more  thorough 
investigation  into  the  original  purposes  and  objects  of  that 
Constitution,  and  especially  with  a  more  thorough  exposi- 
tion of  those  objects  and  purposes  by  those  who  framed  it, 
and  have  been  entrusted  to  administer  it,  I  should  not 
shrink  even  from  that  imputation.  I  hope  I  know  more  of 
the  Constitution  of  my  country  than  I  did  when  I  was 
twenty  years  old.  I  hope  I  have  contemplated  its  great 
objects  more  broadly.  I  hope  I  have  read,  with  deeper 
interest,  the  sentiments  of  the  great  men  who  framed  it.  I 
hope  1  have  studied  with  more  care  the  condition  of  the 
country  when  the  convention  assembled  to  form  it.  And 
yet  I  do  not  know  that  I  have  much,  sir,  to  retract  or  to  change 
on  these  points.* 

*  Mr.  Webster  gave  the  following  reasons  in  Boston  why  protection  should  be 
borne: 

44  We  see  (said  Mr.  Webster)  most  enlightened  nations,  which  have  adopted  this 
artificial  system,  are  tired  of  it;  we  see  the  most  distinguished  men  in  England, 
for  instance,  of  all  parties,  condemning  it.  The  only  difference  of  opinion  is, 
whether  the  disease  is  not  so  inveterate  as  to  yield  to  no  remedy  which  would  not 
produce  greater  evils.  The  only  difference  is,  whether  it  be  an  evil  grievous  but 
to  be  borne,  but  a  grievous  evil  not  to  be  borne.  He  alluded  to  England,  because 
her  example  had  been  so  often  quoted  as  a  model  for  our  imitation.  But  why 
should  we  adopt,  on  her  example,  what  she  herself  laments,  and  would  be  glad 
to  be  rid  of?" 


WEBSTER'S  CHANGE  OF  VIEWS.  195 

But,  sir,  I  am  of  the  opinion  of  a  very  eminent  person 
who  had  occasion,  not  long  since,  to  speak  of  this  topic  in 
another  place.  Inconsistencies  of  opinions,  arising  from 
changes  of  circumstances,  are  often  justifiable.  But  there 
is  one  sort  of  inconsistency  which  is  culpable.  It  is  the 
inconsistency  between  a  man's  convictions  and  his  vote; 
between  his  conscience  and  his  conduct.  No  man  shall  ever 
charge  me  with  an  inconsistency  like  that.  And  now,  sir, 
allow  me  to  say,  that  I  am  quite  indifferent,  or  rather  thank- 
ful, to  these  conductors  of  the  public  press  who  think  they 
cannot  do  better  than  now  and  then  to  spread  my  poor 
opinions  before  the  public.  [A  laugh.] 

I  have  said  many  times,  and  it  is  true,  that  up  to  the  year 
1824,  the  people  of  that  part  of  the  country  to  which  I 
belong,  being  addicted  to  commerce,  having  been  successful 
in  commerce,  their  capital  being  very  much  engaged  in  com- 
merce, were  adverse  to  entering  upon  a  system  of  manufac- 
turing operations.  Every  member  in  Congress  from  the 
State  of  Massachusetts,  with  the  exception  of  one,  I  think, 
voted  against  the  act  of  1824.  But  what  were  we  to  do? 
Were  we  not  bound,  after  '17  and  '24,  to  consider  that  the 
policy  of  the  country  was  settled,  had  become  settled,  as  a 
policy,  to  protect  the  domestic  industry  of  the  country  by 
solemn  laws?  The  leading  speech  which  ushered  in  the  act 
of  '24  was  called  a  speech  for  an  "  American  System."  The 
bill  was  carried  principally  by  the  Middle  States.  Pennsyl- 
vania and  New  York  would  have  it  so;  and  what  were  we 
to  do?  Were  we  to  stand  aloof  from  the  occupations  which 
others  were  pursuing  around  us?  Were  we  to  pick  clean 
teeth  on  a  constitutional  doubt,  which  a  majority  in  the 
councils  of  the  nation  had  overruled?  No,  sir;  we  had  no 
option.  All  that  was  left  us  was  to  fall  in  with  the  settled 
policy  of  the  country;  because  if  anything  can  ever  settle 
the  policy  of  the  country,  or  if  anything  can  ever  settle  the 
practical  construction  of  the  Constitution  of  the  country,  it 


196  WEBSTER'S  CHANGE  OF  VIEWS. 

must  be  ftiese  repeated  decisions  of  Congress,  and  enactments 
of  successive  laws  conformable  to  these  decisions.  New 
England,  then,  did  fall  in.  She  went  into  the  manufactur- 
ing operations,  not  from  original  choice,  but  from  the 
necessity  or  the  circumstances  in  which  the  public  councils 
had  placed  her.  And  for  one,  I  resolved  then,  and  have 
maintained  that  resolution  ever  since,  that,  having  compelled 
the  Eastern  States  to  go  into  these  operations  for  a  liveli- 
hood, the  country  was  bound  to  fulfill  the  just  expectations 
which  it  had  inspired. 

I  now  come,  Mr.  President,  to  the  last  topic  on  which  I 
propose  to  trespass  on  the  patience  of  the  Senate;  it  is  the 
effect  of  the  change  proposed  by  this  bill  upon  the  general 
employment,  labor,  and  industry  of  the  country.  And  I 
would  beg,  sir,  in  this  view,  to  ask  the  reading  of  a  petition 
which  has  been  lying  on  my  table  for  some  days,  but  which 
I  have  not  had  an  opportunity  to  present.  It  is  a  very  short 
petition  from  the  mechanics  and  artisans  of  the  city  of 
Boston.  [The  Clerk  then  read  the  petition.]  Now,  sir, 
these  petitioners  remonstrate  against  this  bill,  not  in  behalf 
of  corporations  and  great  establishments,  not  in  behalf  of 
rich  manufacturers,  but  in  behalf  of  "  men  who  labor  with 
their  own  hands,"  whose  "  only  capital  is  their  labor,"  and 
"who  depend  on  that  labor  for  their  support,  and  for  any- 
thing  they  may  be  able  to  lay  up." 

Mr.  President,  he  who  is  the  most  large  and  liberal  in  the 
tone  of  his  sentiments  towards  all  the  interests  of  all  parts 
of  the  country;  he  who  most  honestly  and  firmly  believes 
that  these  interests,  though  various,  are  consistent;  that 
they  all  may  well  be  protected,  preserved,  and  fostered  by  a 
wise  administration  of  law  under  the  existing  Constitution 
of  the  United  States;  and  he  who  is  the  most  expansive 
patriot,  and  wishes  well  and  equally  well,  to  every  part  of 
the  country,  even  he  must  admit  that,  to  a  great  extent, 
there  is  a  marked  division  and  difference  between  the  plan- 


WEBSTER'S  CHANGE  OF  VIEWS.  197 

tation  States  of  the  South,  and  the  masses  in  the  agricul- 
tural and  manufacturing  States  of  the  North.  There  is  a 
difference  growing  out  of  early  Constitutions,  early  laws 
and  habits,  and  resulting  in  a  different  description  of  labor; 
and  to  some  extent,  with  the  most  liberal  sentiments  and 
feelings,  every  man  who  is  concerned  in  enacting  laws  with 
candor,  justice,  and  intelligence,  must  pay  a  proper  regard 
to  that  distinction.  The  truth  is,  that  in  one  part  of  the 
country  labor  is  a  thing  more  unconnected  with  capital  than 
in  the  other.  Labor,  as  an  earning  principle,  or  as  an  ele- 
ment of  society  working  for  itself,  with  its  own  hopes  of 
gain,  enjoyment,  and  competence,  is  a  different  thing  from 
that  labor  which  in  the  other  part  of  'the  country  attaches  to 
capital,  rises  and  falls  with  capital,  and  is  in  truth  a  part  of 
capital.  Now,  sir,  in  considering  the  general  effect  of  the 
change  sought  to  be  brought  about,  or  likely  to  be  brought 
about  by  this  bill,  upon  the  employment  of  men  in  this 
country,  regard  is  properly  to  be  paid  to  this  difference 
which  I  have  mentioned;  yet  it  is  at  the  same  time  true, 
that  there  are  forms  of  labor,  especially  along  the  seacoast 
and  along  the  rivers,  in  all  the  Southern  States,  which  are 
to  be  affected  by  this  bill  as  much  as  the  labor  of  any  por- 
tion of  the  Middle  or  Northern  States.  The  artisan  in  every 
State  has  just  the  same  interest  —  the  same  at  the  South  as 
at  the  North.  And  this  is  at  the  foundation  of  all  our  laws, 
from  1789  downward,  which  have  in  view  the  protection  of 
American  labor.  The  first  purpose,  the  first  object  was, 
the  full  protection  of  the  labor  of  these  artisans.  That 
subject  was  gone  over  the  other  day  by  my  friend  from 
Maryland  [Mr.  Johnson],  who  presented  to  the  considera- 
tion of  the  Senate  the  first  memorial  ever  sent  to  Congress 
on  the  subject  of  protection.  It  was  from  the  city  of  Balti- 
more, and  it  was  in  1789.  And  from  that  day  to  this, 
Baltimore  has  been  more  earnest  and  steady  in  her  attach- 
ment  to  a  system  of  law,  which  she  supposed  gave  encour 


198  WEBSTER'S  CHANGE  OF  VIEWS. 

ment  to  her  artisans,  than  almost  any  other  city  of  the 
Union.  I  say  she  has  been  steady  and  earnest,  sir.  If 
she  has  ever  faltered,  for  a  moment,  she  will,  in  a  moment, 
resume  her  attitude,  and  pursue  her  accustomed  course. 

Now,  sir,  taking  the  mass  of  men  as  they  exist  amongst 
us,  what  is  it  that  constitutes  their  prosperity  ?  Throughout 
the  country,  perhaps  more  especially  at  the  North,  from 
early  laws  and  habits,  there  is  a  distribution  of  all  the  prop- 
erty accumulated  in  one  generation,  among  the  whole  suc- 
cession of  sons  and  daughters  in  the  next.  Property  is 
everywhere  distributed  as  fast  as  it  is  accumulated,  and  not 
in  more  than  one  case  out  of  a  hundred  is  there  any  accu- 
mulation beyond  the  earnings  of  one  or  two  generations. 
The  consequence  of  this  is,  a  great  division  of  property  into 
small  parcels,  and  a  considerable  equality  in  the  condition 
of  a  great  portion  of  the  people  ;  and  the  next  consequence 
is,  that  out  of  the  whole  mass,  there  is  a  very  small  propor- 
tion, hardly  worthy  of  being  named,  that  does  not  pursue 
some  active  business  for  a  living.  Who  is  there  that  lives 
on  his  income  ?  How  many,  out  of  millions  of  prosperous 
people  between  this  place  and  the  British  Provinces,  and 
throughout  the  North  and  West,  are  there,  who  live  without 
being  engaged  in  active  business  ?  None  ;  the  number  is 
not  worth  naming.  This  is,  therefore,  a  country  of  labor. 
I  do  not  mean  manual  labor  entirely.  There  is  a  great  deal 
of  that,  but  I  mean  some  sort  of  employment  that  requires 
personal  attention,  either  of  oversight  or  manual  perform- 
ance, some  form  of  active  business.  This  is  the  character 
of  our  people,  and  that  is  the  condition  of  our  people.  Our 
destiny  is  labor.  Now,  what  is  the  first  great  cause  of  pros- 
perity with  such  a  people  ?  Simply,  employment.  Why, 
we  have  cheap  food  and  cheap  clothing,  and  there  is  no  sort 
of  doubt  that  these  things  are  very  desirable  to  all  persons 
of  moderate  circumstances,  and  laborers.  But  they  are  not 
the  first  requisites.  The  first  requisite  is  that  which  enables 


WEBSTER'S  CHANGE  OF  VIEWS.  199 

men  to  buy  food  and  clothing,  cheap  or  dear.  And  if  I 
were  to  illustrate  my  opinions  on  this  subject,  by  example, 
I  should  take,  of  all  the  instances  in  the  world,  the  present 
condition  of  Ireland. 

I  am  not  about  to  prescribe,  Mr.  President,  forms  of 
legislation  for  Ireland,  or  principles  to  the  Parliament  of 
Great  Britain  for  the  government  of  Ireland.  I  am  not 
about  to  suggest  any  remedy  for  the  bad  state  of  things 
which  exists  in  that  country  ;  but  what  that  state  of  things 
is,  and  what  has  produced  it,  is  just  as  plain  and  visible  to 
my  view  as  a  turnpike  road  ;  and  I  confess  that  I  am  aston- 
ished, that  learned  and  intelligent  men,  who  seem  to  have 
been  brought  up  under  certain  notions,  or  systems,  which 
appear  to  have  turned  their  eyes  from  the  true  view  of  the 
case,  have  been  unable  to  solve  the  Irish  problem.  Well, 
now,  what  is  it  ?  Ireland  is  an  over-peopled  country,  it  is 
said.  It  has  eight  and  a  half  millions  of  people  on  an 
area  of  thirty-one  thousand  eight  hundred  square  miles.  It 
is,  then,  a  very  dense  population ;  perhaps  a  thicker  popula- 
tion, upon  the  whole,  than  England.  But  why  are  the 
people  of  Ireland  not  prosperous,  contented,  and  happy?  We 
hear  of  a  potato  panic,  and  a  population  in  Ireland  distressed 
by  the  high  price  of  potatoes.  Why,  sir,  the  price  of  potatoes 
in  this  city  is  three  times  the  price  of  potatoes  in  Dublin;  and 
at  this  moment  potatoes  are  twice  as  dear  throughout  the 
United  States  as  throughout  Ireland.  There  are  potatoes 
enough,  or  food  of  other  kinds,  but  the  people  are  not  able 
to  buy  it.  And  why?  That  is  the  stringent  question.  Why 
cannot  the  people  of  Ireland  buy  potatoes  or  other  food  ? 
The  answer  to  this  question  solves  the  Irish  case  ;  and  that 
answer  is  simply  this  :  The  people  have  not  employment. 
They  cannot  obtain  wages.  They  cannot  earn  money.  The 
sum  of  their  social  misery  lies  in  these  few  words.  There 
is  no  adequate  demand  for  labor.  One-half,  or  less  than 
one-half,  of  all  the  strong  and  healthy  laborers  of  Ireland 


200  WEBSTER'S  CHANGE  OF  VIEWS. 

are  quite  enough  to  fulfill  all  demand,  and  occupy  all  employ- 
ments. Does  not  this  admitted  fact  explain  the  whole  case  ? 
If  but  half  the  laborers  are  employed,  or  the  whole  employed 
but  half  the  time,  or  in  whatever  form  of  division  it  be 
stated  ;  if  the  result  is,  that  there  is,  in  so  thickly  a  peopled 
country,  only  half  enough  of  employment  for  labor  and 
industry,  who  need  to  be  surprised  to  find  poverty  and  want 
the  consequence  ?  And  who  can  be  surprised,  then,  that 
other  evils,  not  less  to  be  lamented,  should  also  be  found  to 
exist  among  a  people  of  warm  temperament  and  social  habits 
and  tendencies  ?  It  would  be  strange,  if  all  these  results 
should  not  happen. 

But,  then,  this  only  advances  the  inquiry  to  the  real 
question — Why  are  the  laboring  people  of  Ireland  so  desti- 
tute of  useful  and  profitable  employment  ?  This  is  a  question 
of  the  deepest  interest  to  those  who  are  charged  with  the 
duty  of  remedying  the  evil,  if  it  can  be  remedied.  But  it 
is  rather  beside  any  present  purpose  of  mine.  It  may  be 
said,  in  general,  that  Ireland  has  been  unfortunate,  as  well 
as  badly  governed.  In  the  course  of  two  centuries,  much 
the  greater  part  of  the  soil  of  Ireland,  generally  supposed 
as  much  as  nine-tenths,  has  been  forfeited  to  the  crown,  and 
by  the  crown  given  or  sold  to  persons  in  England,  the  heads 
of  opulent  families  or  others.  These  new  English  proprietors 
are  known  as  absentee  landlords.  They  own  a  vast  portion 
of  the  island.  The  absentee  landlord  is  not  a  man  who  has 
grown  up  in  Ireland,  and  has  gone  over  to  England  to  spend 
his  income.  He  may  be  a  man  who  never  saw  Ireland  in 
his  life.  I  have  heard  of  families,  no  member  of  which  has 
visited  its  Irish  estates  for  half  a  century,  the  lands  being 
all  the  time  under  "rack-rent,"  in  the  hands  of  " middle- 
men," and  all  pressing  the  peasantry  and  labor  to  the  dust. 

There  is  a  strange  idea,  at  least  it  seems  strange  to  mo, 
which  most  respectable  men  entertain  on  this  subject  of 
Ireland.  Mr.  McCulloch,  so  highly  distinguished  an  atithori- 


WEBSTER'S  CHANGE  OF  VIEWS.  201 

ty,  for  example,  will  insist  upon  it,  that  there  is  no  evil  in 
Irish  absenteeism,  because  lie  proceeds  on  the  theory  which, 
he  says,  admits  of  no  exception — that  it  is  best  for  a  man  to 
buy  where  he  can  buy  cheapest.  "Well,  that  is  undoubtedly 
so,  if  he  have  the  means  of  buying.  Now,  if  Irish 
absenteeism  did  not  diminish  the  employment  of  the  people 
of  Ireland,  and  so  diminish  their  means  of  buying,  the 
argument  would  hold.  But  who  does  not  see,  that  if  the 
landlord  lived  in  Ireland,  consuming  for  his  family  and 
retainers  the  products  of  Ireland,  it  would  augment  the 
employment  of  Ireland  ?  It  seems  clear  to  me  that  resi- 
dence would  not  only  give  general  countenance  and  encour- 
agement to  the  laboring  classes,  and  benefit  both  landlord 
and  tenant,  by  dispensing  with  the  services  of  middle-men, 
but  that  it  would  also  do  positive  good,  by  producing  new 
demands  for  labor.  From  early  times  the  English  govern^ 
ment  has  discouraged  in  Ireland  every  sort  of  manufacture, 
except  the  linen  manufactured  in  the  north.  It  has,  on  the 
other  hand,  encouraged  agriculture.  It  has  given  bounties 
on  wheat  exported.  The  consequence  has  come  to  be  this, 
that  the  surface  of  Ireland  is  cut  up  into  so  many  tenements 
and  holdings,  that  every  man's  labor  is  confined  to  such  a 
small  quantity  of  land,  that  there  is  not  half  employment 
for  labor,  and  the  lands  are  cultivated  miserably  after  all. 
Mr.  McCulloch  says  that  four-fifths  of  the  labor  of  Ireland 
is  laid  out  upon  the  land.  There  is  no  other  source  of 
employment  or  occupation.  This  land  being  under  a  "  rack- 
rent,"  is  frequently  in  little  patches,  sometimes  of  not  more 
than  a  quarter  of  an  acre,  merely  to  raise  potatoes,  the 
cheapest  kind  of  food.  This  is  the  reason  why  labor  is 
nothing,  and  can  produce  nothing  but  mere  physical  living, 
until  the  system  shall  be  entirely  changed.  This  constitutes 
the  great  difference  between  the  state  of  things  in  Europe 
and  America.  In  Europe,  the  question  is,  how  men  can 
live.  With  us,  the  question  is,  how  well  they  can  live, 
9* 


202  WEBSTER'S  CHANGE  OP  VIEWS. 

Can  they  live  on  wholesome  food,  in  commodious  and  com- 
fortable dwellings  ?  Can  they  be  well  clothed,  and  be  able 
to  educate  their  children  ?  Such  questions  do  not  arise  to 
the  political  economists  of  Europe.  When  reasoning  on 
such  cases  as  that  of  Ireland,  the  question  with  them  is,  how 
physical  being  can  be  kept  from  death.  That  is  all. 

FREE  TRADE  ENCOURAGES  DOMESTIC  LABOR. 

I  will  now  proceed,  sir,  to  state  some  objections  of  a  more 
general  nature  to  the  course  of  Mr.  Speaker's  observations. 
He  seems  to  me  to  argue  the  question  as  if  all  domestic 
industry  were  confined  to  the  production  of  manufactured 
articles;  as  if  the  employment  of  our  own  capital  and  our 
own  labor  in  the  occupations  of  commerce  and  navigation 
were  not  as  emphatically  domestic  industry  as  any  other 
occupation.  Some  other  gentlemen,  in  the  course  of  the 
debate,  have  spoken  of  the  price  paid  for  every  foreign 
manufactured  article  as  so  much  given  for  the  encourage- 
ment of  foreign  labor,  to  the  prejudice  of  our  own,  but  is 
not  every  such  article  the  product  of  our  own  labor  as  truly 
as  if  we  had  manufactured  it  ourselves?  Our  labor  has 
earned  it,  and  paid  the  price  for  it.  It  is  so  much  added  to 
the  stock  of  national  wealth.  If  the  commodity  were 
dollars,  nobody  would  doubt  the  truth  of  this  remark,  and 
it  is  precisely  as  correct  in  its  application  to  any  other  com- 
modity as  to  silver.  One  man  makes  a  yard  of  cloth  at 
home ;  another  raises  agricultural  products  and  buys  a  yard 
of  imported  cloth.  Both  these  are  equally  the  earnings  of 
domestic  industry,  and  the  only  questions  that  arise  in  the 
case  are  two:  the  first  is,  which  is  the  best  mode,  under  all 
the  circumstances,  of  obtaining  the  article ;  the  second  is, 
how  far  this  question  is  proper  to  be  decided  by  government, 
and  how  far  it  is  proper  to  be  left  to  individual  discretion. 
There  is  no  foundation  for  the  distinction  which  .attributes 
to  certain  employments  the  peculiar  appellation  of  American 
industry;  and  it  is,  in  my  judgment,  extremely  unwise  to 
attempt  such  discriminations. 


CHAPTER  XIII. 

DOES   PROTECTION   PROTECT?* 
THOMAS  Gr.  SHEARMAN,  ESQ. 


I. WHAT   IS    PROTECTION? 

44  TT)ROTECTION  to  American  industry"  is  a  high- 
I  sounding  phrase.  If  by  it  is  meant  that  kind  of 
protection  which  a  good  government  gives  against  theft, 
violence,  and  fraud,  then  we  all  want  to  be  protected  our- 
selves, and  to  have  the  same  protection  extended  to  every- 
body. This  idea  makes  the  name  of  " protection"  captivat- 
ing, and  has  given  to  the  protective  system  all  the  popularity 
which  it  has.  But  the  protection  extended  to  American 
industry  is  not  at  all  of  that  kind.  It  is  a  system  of  legisla- 
tion intended  to  compel  every  one  who  lives  in  the  United 
States  to  buy  goods  which  are  manufactured  here  at  a  higher 
price  than  he  could  buy  them  for  outside  of  this  country. 
Its  aim  is  to  prevent  manufactured  goods  from  ever  being 
sold  here  at  as  low  prices  as  they  are  sold  in  Europe.  It 
protects,  or  rather  tries  to  protect,  American  manufacturers 
from  the  necessity  of  making  their  goods  as  well  as  European 
goods  are  made,  if  they  want  to  get  the  same  price.  This 
is  called  protection  against  foreign  competition. 

II. WHAT   ARE    WE    TO   BE    PROTECTED   AGAINST  ? 

When  we  hear  that  we  need  protection,  we  naturally  ask, 
against  what?     The  answer  usually  is,  "against  foreign  com- 

*  Michigan  State  Free  Trade  League,  January  11,  1883. 


201  DOES   PROTECTION    PROTECT? 

petition,"  or,  " against  a  flood  of  foreign  goods,"  or,  "  against 
an  adverse  balance  of  trade, "  or,  as  Judge  Kelley  neatly  puts 
it,  "against  all  comers." 

These  are  all  fine  phrases;  but  they  do  not  mean  anything 
definite.  You  cannot  take  hold  of  them.  No  one  proposes 
to  shut  out  any  foreign  competition,  except  that  which 
comes  from  China;  for  all  parties  rejoice  in  the  increasing 
arrival  of  foreign  laborers  to  compete  with  our  own;  and 
Judge  Kelley,  who  says  he  is  "  against  all  comers,"  is  not;  I 
believe,  even  against  Chinese  comers,  while  he  certainly 
rejoices  in  the  coming  of  the  very  English  workmen  whom 
he  so  much  hates  when  they  remain  at  their  old  home. 
Then,  as  to  the  flood  of  foreign  goods,  it  is  one  of  the  lead- 
ing doctrines  of  the  protectionists  that  protection  makes  us 
so  rich  that  we  shall  import  more  foreign  goods  with  pro- 
tection than  we  should  without  it.  So  they  cannot  object  to 
the  goods.  Indeed,  no  one,  so  far  as  I  can  learn,  objects  to 
receiving  as  many  foreign  goods  as  he  can  get,  provided  he 
is  not  required  to  pay  for  them;  and  the  Bessemer  steel  mills 
import  more  foreign  materials  than  any  equal  number  of 
concerns  in  the  land. 

As  to  the  balance  of  trade,  that  can  hardly  be  the  ground 
of  protection,  since  a  protective  tariff  was  maintained  and 
made  constantly  heavier  for  twelve  years,  from  1861  to  187 3, 
while  with  each  year  the  " adverse  balance  of  trade"  grew 
more  and  more  adverse  to  this  country. 

Reduced  to  plain  English,  the  dangers  against  which  the 
protective  system  protects  us  are  too  much  freedom,  too 
little  work  and  too  much  pay. 

Of  course  protectionists  will  be  indignant  at  this  plain 
way  of  stating  the  case;  but  see  if  they  can  unstate  it.  Is 
it  not  their  desire  to  protect  us  against  freedom  of  trade, 
against  lack  of  work  and  against  the  flood  of  foreign  goods? 
If  protection  is  not  designed  to  accomplish  these  purposes, 
what  is  it  intended  to  do?  Are  not  these  the  favorite 


DOES  PROTECTION  PROTECT?  205 

phrases  of  protectionists  themselves  ?     Let  us  consider  each 
of  these  points: 

1.  We  are  protected  against  freedom  of  trade.     Is  there 
any  intrinsic  advantage  in  that  ?     We  are  not  allowed  to  use 
our  own  discretion  as  to  where  we  shall  buy  or  at  what 
price.     Congress   interferes  and  forbids  us  to  buy  at  the 
English   shop   or  from   the   Irish   farm.     Ireland   sent    us 
potatoes  all  last  year,  and  took  our  corn ;  but  Congress  made 
us  pay  a  penalty  of  more  than  one-third  of  all  the  potatoes 
imported;  not  because  the  money  was  needed  for  revenue, 
but  for  the  express  purpose  of  preventing  us  from  buying 
good  Irish  potatoes,  instead  of  rotten  American  ones.     Eng- 
land  and    Germany   were  willing   to  sell  us  good  woolen 
blankets   at    the   same    price    which   home    manufacturers 
charged  us  for  stuff  made  of  three-fourths  cotton.     We  all 
wanted  to  buy  from  the  foreign  shop ;  but  we  were  protected 
against  the  freedom  of  having  woolen  blankets,  and  were 
tucked  under  disease-breeding  cotton  ones.     Leave  out  of 
view,  for  the  present,  the  other  items  to  the  credit  of  pro- 
tection, and  is  there  any  merit  in  the  system  simply  as  an 
interference  with  freedom  ?     Is  not  freedom  of  selection,  in 
trade  as  in  everything  else,  a  good  thing  ? 

2.  We  are  protected  against  lack  of  work.     Most  people 
want  wages  more  than  work.     But  protectionists  long  ago 
discovered  that  this  was  a  mistaken  desire,  and  that  it  made 
no  difference  what  men  were  paid  for  their  work,  so  long  as 
plenty  of  work  was  provided. 

Tariffs  unquestionably  increase  work,  because  they  shut 
out  some  goods  which  we  must  have,  and  so  compel  our 
people  to  make  them  at  home.  Work  is  increased;  but 
where  is  the  extra  pay  to  come  from  ? 

Horace  Greeley  believed  so  thoroughly  that  increase  of 
work  was  a  blessing,  that  he  spoke  of  the  Chicago  (ire  as 
not  altogether  an  evil,  because  it  made  more  work.  True. 
Let  us  burn  down  Brooklyn,  and  there  will  be  plenty  of  work 


206  DOES    PROTECTION   PROTECT? 

for  us.  Burn  New  York  City  and  there  will  be  more. 
Better  still;  burn  out  the  whole  country;  and  what  a  vast 
amount  of  work  there  will  be! 

But  where  are  the  wages  to  come  from  ? 

Wages  are  paid  out  of  what  has  already  been  saved.  A 
large  city  represents  so  much  accumulated  savings.  When 
the  city  is  destroyed,  its  inhabitants  have  the  work  of 
rebuilding  it;  but  they  have  to  do  it  with  their  own  hands, 
on  no  wages,  as  people  do  after  a  great  war,  or  they  have  to 
borrow  the  money  from  some  other  city,  with  which  to  pay 
wages  ;  and  if  they  do  that,  there  is  just  so  much  taken 
from  the  amount  which  that  other  city  could  have  afforded 
to  pay  in  wages  for  other  work.  Destruction  of  property 
increases  work,  but  diminishes  wages. 

Now,  "  Protection,"  just  like  a  burned  city,  makes  more 
work,  but  provides  no  more  wages. 

People  seem  to  think  that,  if  you  can  only  make  plenty 
of  work,  no  matter  how,  more  wages  are  sure  to  come.  Are 
they?  If  work  is  all  you  want,  I  alone  will  find  work  for 
ten  thousand  men.  There  are  more  than  100,000  miles  of 
roads  in  this  country,  which  ought  to  be  macadamized  at 
once.  There  are  thousands  of  farms,  which  the  owners  will 
allow  to  you  to  cultivate  for  their  benefit.  Go  dig,  young 
man  !  Do  you  ask  for  wages  ?  I  will  give  you  as  much  as  a 
protective  tariff  gives — just  none  at  all. 

If  mere  increase  of  work  is  wanted  (and  that  is  all  which 
protection  can  possibly  give),  break  up  all  labor-saving 
machines,  all  railroads  and  telegraphs;  adopt  Ruskin's 
theory,  and  have  all  goods  carried  from  place  to  place  on 
the  backs  of  men  or  mules,  or  by  row-boats.  That  will  give 
employment  for  all.  But,  lest  you  should  not  encourage 
domestic,  industry  sufficiently  by  all  this,  have  a  standing 
army  of  a  million  men,  so  that  the  rest  may  have  to  work 
for  their  support.  Then  tie  every  man's  right  arm  behind 
h;s  back,  and  by  one  grand  stroke  you  will  have  doubled 
the  amount  of  labor  for  every  man? 


DOES  PROTECTION  PROTECT?          207 

3.  We  are  protected  against  too  much  pay.  Foreigners 
offer  us  so  much  iron,  steel,  wool,  clothing,  and  food,  that 
we  become  frightened  and  cry:  "Here  comes  a  flood  of 
foreign  goods!  Shut  them  out!  "  But  this  is  only  their 
way  of  paying  for  things,  which  they  buy  of  us.  "We  try, 
by  means  of  a  tariff,  to  prevent  them  from  paying  us  as 
large  a  price  for  what  we  have  sold  them  as  they  are  willing 
to  pay.  We  want  to  force  them  into  paying  gold  for  all 
that  they  buy.  Sometimes  we  succeed  in  making  them  pay 
a  large  share  in  gold.  But,  as  we  cannot  eat  it  or  wear  it, 
or  make  any  use  of  it,  the  only  result  is  that  we  immediately 
pay  it  out  for  iron,  steel,  clothing,  and  sugar,  only  getting 
one-third  less  of  all  these  things  than  we  might  have  had 
for  the  same  price,  if  we  would  have  taken  them  from  the 
foreigners  at  first. 

We  are  dreadfully  afraid  of  an  adverse  balance  of  trade, 
that  is,  of  our  imports  exceeding  our  exports  in  the  value  of 
each  to  us;  and  one  of  the  chief  objects  of  protection  is  to 
prevent  this  from  coming  to  pass. 

But  exports  are  what  we  pay  to  foreigners. 

Imports  are  what  foreigners  pay  to  us. 

If  our  imports  were  not  worth  more  to  us  than  our  ex- 
ports, we  should  be  doing  a  losing  business.  If  we  want 
nothing  but  a  "  favorable  balance  of  trade,"  as  it  is  called, 
the  short  and  sure  way  to  get  it  is  to  load  our  ships  with 
$500,000,000  worth  of  goods,  send  them  out  to  sea,  and 
sink  them  there. 

But  you  say  that  what  you  want  is  to  prevent  a  "  drain  of 
gold ; "  and  you  are  afraid  that,  if  we  take  goods  from  for- 
eigners,  they  will  make  us  pay  for  them  in  gold.  Don't  be 
frightened.  They  can't  do  it;  for  the  simple  reason  that  we 
have  not  gold  enough  and  cannot  get  it.  If  they  wiU  not 
accept  pay  in  other  things,  they  will  not  get  paid  at  all. 
And  even  if  we  could  pay  them  any  large  amount  of  gold, 
they  would  have  no  use  for  it,  except  to  pay  it  out  again  for 


208  DOES  PROTECTION  PROTECT? 

something  more  useful,  whicli  they  would  do  at  once;  and 
so,  if  we  wanted  it,  it  would  find  its  way  back  to  us  very 
quickly.  As  a  matter  of  fact  we  have  never  sent  gold 
abroad  to  any  large  amount,  except  when  we  used  paper 
money  to  such  a  degree  that  we  had  no  use  for  the  gold. 

Nobody  wants  to  keep  gold,  unless  he  is  a  crazy  miser. 
It  is  the  very  poorest  kind  of  permanent  investment.  You 
cannot  eat  gold,  or  wear  gold,  or  cultivate  gold.  You  have 
to  part  with  it,  in  order  to  make  it  of  the  slightest  use. 
The  man  to  whom  you  lend  or  pay  it  looks  around  anxiously 
for  the  first  chance  to  get  rid  of  it  for  something  better. 
The  whole  Yanderbilt  family  do  not  own,  at  this  moment, 
$2,000  in  gold,  nor  $10,000  in  any  kind  of  money,  coin  or 
paper.  The  fifty  greatest  millionaires  in  America  do  not 
keep  on  hand  as  much  as  $500  each,  in  any  kind  of  money. 

A  few  banks  keep  coin  on  hand;  but  it  belongs  to  them; 
not  to  their  depositors;  and  even  the  banks  are  anxious  to 
get  rid  of  four-fifths  of  their  money.  Indeed,  a  bank  which 
could  not  persuade  its  customers  to  take  out  much  more 
_  than  four-fifths  of  all  the  coin  whicli  they  brought  in,  would 
promptly  wind  up  business,  because  it  could  not  pay  ex- 
penses. 

All  this  is  just  as  true  of  other  nations  as  of  our  own — at 
least,  of  all  civilized  nations;  and  the  only  exception  is  in 
countries  where  the  governments  rob  the  people  of  their 
property  so  often,  that  the  people  have  to  hide  their  wealth, 
which  they  can  best  do  in  gold  or  silver. 

More  than  nine-tenths  of  all  exports  from  this  or  any 
other  country  consist  of  merchandise,  not  coin.  They  always 
did  and  always  will.  Accounts  must  balance  between 
nations  as  well  as  men.  It  is  true  that  we  send  more  goods 
to  England  than  she  sends  to  us;  but  she  sends  her  goods, 
to  the  amount  of  the  balance,  to  Brazil,  the  West  Indies, 
China,  etc.,  and  they  send  us,  in  their  productions,  millions 
of  dollars  more  than  we  send  to  them.  You  cannot  sell 
without  buying,  and  you  cannot  buy  without  selling. 


DOES    PROTECTION    PROTECT?  209 

III. HOW    PROTECTION    UNDERTAKES    TO    PROTECT. 

Not  very  long  ago  protection  used  to  be  carried  on  by 
absolutely  prohibiting  the  importation  of  certain  classes  of 
foreign  goods.  But  no  one  ventures  to  propose  any  such- 
straightforward  method  in  this  country,  except  with  regard  to 
ships.  Those  are  prohibited  from  coming  under  the  Amer- 
ican flag  on  any  terms;  and  a  pretty  business  has  been  made 
of  our  shipping  by  such  protection,  for  it  is  protected  to  the 
point  of  death;  and  invitations  to  the  funeral  are  already 
out. 

The  only  method  of  protecting  American  manufacturers, 
other  than  ships,  consists  of  a  protective  tariff.  What  is 
that  ?  It  is  a  law  by  which,  under  the  pretense  of  collecting 
taxes  for  the  support  of  the  general  government,  those  taxes 
are  so  levied  that  as  little  money  as  can  possibly  be  con- 
trived shall  go  to  the  government,  and  as  much  as  possible 
shall  go  into  the  pockets  of  a  few  private  persons,  for  their 
own  use. 

Now,  if  an  act  were  passed,  declaring  this  object  on  its 
face,  as  for  example,  thus:  "  Be  it  enacted,  that  every  person 
presuming  to  purchase  iron  in  Europe,  shall  pay  50  per 
cent,  of  its  value  to  D.  J.  Morrell,  and  every  person  buying 
steel  rails  in  Europe  shall  pay  100  per  cent,  of  their  value  to 
0.  W.  Potter  of  Illinois,  for  the  encouragement  of  the  said 
Morrell  &  Potter  in  their  laudable  industry,"  such  an  act 
would  be  at  once  held  unconstitutional  and  void  as  mere 
robbery.  You  could  not  get  even  the  present  Congress,  bad 
as  it  is,  to  pass  any  such  statute  as  that.  But  when  an  act 
is  passed  which  provides  for  the  same  amount  of  taxation, 
with  a  full  knowledge  that  the  effect  of  it  will  be,  not  to  put 
that  sum  of  money  into  the  government  treasury,  but  to  put 
it  into  the  pockets  of  Mr.  Morrell  and  Mr.  Potter,  and  with 
the  avowed  intent  of  producing  that  result;  then,  not  only 
is  such  a  law  held  to  be  perfectly  constitutional,  but  it  is 
considered  perfectly  proper  for  Mr.  Morrell  to  get  a  seat  in 


210  DOES   PROTECTION    PROTECT? 

Congress  and  vote,  as  he  did  for  just  such  a  bill,  putting  just 
so  much  money  into  his  own  personal  pocket. 

Protection  is  a  " blind  pool."  Few  understand  what  a 
"blind  pool"  is;  but  it  is  a  phrase  well  understood  among 
speculators.  John  Smith,  for  example,  having  obtained  the 
confidence  of  a  large  number  of  speculators,  informs  them 
that  he  has  a  scheme  in  his  mind  by  which  enormous  profits 
can  be  made,  but  which  requires  the  investment  of  a  large 
amount  of  capital  on  terms  of  absolute  secrecy.  If  (he 
says)  he  were  to  tell  any  human  being  what  use  he  made  of 
the  money,  not  merely  when  he  bought  and  when  he  sold, 
but  even  what  he  intended  to  buy  and  sell,  rival  speculators 
would  put  up  the  price  of  the  subject  of  speculation  to  such 
a  degree  as  would  make  it  useless  for  him  to  attempt  any- 
thing. A  well-known  gentleman  in  New  York,  about  two 
years  ago,  proposed  a  blind  pool  of  this  kind  to  his  friends; 
and  in  less  than  two  days  over  $17,000,000  were  subscribed, 
of  which  he  accepted  only  $7,000,000,  and  used  it  for  sev- 
eral months  without  giving  one  of  the  investors  a  hint  as  to. 
where  the  money  had  gone  or  when  it  would  come  back. 
In  the  end,  the  transaction  proved  very  profitable  to  all  con- 
cerned. But,  of  course,  this  gentleman  acted  under  many 
restraints.  Not  only  was  his  high  reputation  a  guarantee 
for  the  propriety  of  his  action,  but  everybody  knew  that 
sooner  or  later  he  could  be  compelled  to  account  for  every 
dollar  of  the  money  by  legal  proceedings,  and  could,  after  a 
reasonable  lapse  of  time,  be  required  to  show  exactly  what 
he  had  bought,  and  at  what  price,  and  when  and  at  what 
price  he  had  sold. 

Now,  protection  is  a  blind  pool  of  this  kind,  with  three 
important  points  of  difference. 

1.  You  know  nothing  whatever  of  the  character  or  rep- 
utation of  the  men  to  whom  you  entrust  your  money;  in- 
deed, you  do  not  even  know  their  names. 

2.  You  not  only  have  no  legal  right  whatever,  to  enquire 


DOES  PROTECTION  PROTECT?          211 

what  they  have  done  with  your  money;  but  you  have  an 
absolute  certainty  that  no  such  account  will  ever  be  given  to 
you  or  to  any  one  else. 

3.  Even  if  the  persons  who  took  your  money  were  ever 
so  much  inclined  to  give  you  an  account  of  the  profits  made 
on  the  transaction,  and  to  tell  you  what  they  have  done  with 
your  money,  they  could  not  possibly  do  it. 

Protection  consists  in  a  heavy  tax  levied  upon  all  the 
people  of  this  country,  in  a  proportion  bearing  ten  times  as 
heavily  on  the  poor  as  on  the  rich,  under  an  assurance  that, 
in  some  mysterious  way,  a  large  profit  will  be  made  upon 
these  taxes,  which  will  be  redistributed  among  us  all  in  like 
proportions.  We  are  assured  that  this  heavy  taxation  is 
necessary  to  enable  manufacturers  to  pay  high  wages  to 
their  workmen,  that  these  workmen  in  their  turn  will  pay 
good  prices  to  the  farmers  and  shop-keepers  for  what  they 
eat,  drink,  and  wear,  and  that  thus  we  shall  all  make  money 
by  being  taxed. 

Under  this  assurance,  the  manufacturers  tax  you  as  much 
as  they  like;  they  give  to  their  workmen  only  just  so  much 
as  they  like;  and  the  workmen  pay  to  the  farmers  and  shop- 
keepers no  more  than  they  can  possibly  help.  Nobody 
knows  exactly  what  manufacturers  receive  the  benefit  of 
these  taxes;  nobody  knows  precisely  what  profit  they  make 
out  of  them;  nobody  knows  precisely  what  wages  they  pay 
their  workmen;  everybody  knows  that  they  do  not  pay 
their  workmen  a  penny  more  than  other  employers  pay,  who 
get  none  of  these  taxes;  and  there  is  not  in  the  whole  land 
one  human  being  who  could,  if  he  would,  show  you  where 
one  single  penny  of  the  benefit  positively  comes  back  from 
these  heavy  taxes  to  anybody  except  a  few  thousand  manu- 
facturers. But,  undoubtedly,  these  manufacturers  are  hon- 
orable men;  their  intentions  are  very  good;  and  they 
assure  you  continually  that  their  only  motive  for  taxing  you 
so  heavily  is  to  pay  you  larger  profits  in  some  mysterious 


212  DOES   PROTECTION   PROTECT? 

way,  which  they  do  not  themselves  understand,  but  which 
they  are  quite  sure  would  be  satisfactory  to  you,  if  you 
could  only  understand  it. 

Now,  let  me  put  may  hands  in  your  pockets,  as  you  let 
the  protected  manufacturers  do.  You  give  to  them  about 
one-quarter  of  all  that  you  earn,  on  the  strength  of  some- 
body's assurance  that  you  will  get  it  all  back  with  a  profit. 
This  " somebody"  you  do  not  know.  You  never  did  see 
him,  and  you  never  will.  You  cannot  give  me  the  name  of 
any  one  man  who  will  make  that  assurance  on  his  own 
responsibility.  He  gives  you  no  security;  indeed,  he  does 
not  give  you  his  personal  promise.  He  simply  tells  you 
that  "it  must  be  so."  Now,  give  to  me  another  quarter  of 
your  earnings.  I  am  no  anonymous  protectionist.  I  am 
not  a  newspaper  article  without  signature,  which  is  really  all 
the  guaranty  that  you  have  for  the  return  of  the  quarter  of 
your  earnings  which  you  now  give  up.  Give  me  a  quarter 
of  your  earnings,  and  I  will  give  you  my  written  guaranty 
to  use  them  for  your  advantage,  charging  for  my  services 
only  half  the  commission  that  manufacturers  do — say  3  per 
cent,  a  year.  More  than  that:  I  will  give  bonds,  signed  by 
some  of  the  wealthiest  men  in  New  York,  in  four  times  the 
amount  of  any  money  you  put  in  my  hands,  to  account  for 
it  and  to  invest  it  for  your  benefit,  only  reserving  the  right 
to  use  it  in  my  own  discretion.  Why  do  you  not  rise  up 
and  accept  this  offer  ? 

Perhaps  you  are  not  entirely  satisfied  with  me.  Well,  I 
will  procure  you  the  same  offer  from  almost  any  other  person 
whom  you  may  name.  I  will  get  a  bank  to  do  it  for  you. 
Why  do  you  not  accept  this  offer  ?  Because,  of  course,  you 
all  know  that  you  would  be  fools  if  you  did.  You  know 
very  well  that  neither  I  nor  any  one  else  can  possibly  use 
your  earnings  to  as  much  advantage  for  you  as  you  can 
yourselves.  Some  surplus  money  you  may  be  willing  to 
invest;  but  even  then  you  prefer  to  lend  it  out  at  inter- 


DOES  PROTECTION  PROTECT?          213 

est  on  good  security.  You  would  not  let  any  one  take 
your  earnings  for  the  mere  purpose  of  speculation,  with  no 
other  security  than  a  promise  that  he  would  give  you  such 
part  of  the  profits  as  he  saw  fit,  in  case  of  his  success.  Yet 
you  allow  one  quarter  of  your  earnings  to  be  taken  every 
year  for  the  purpose  of  speculation,  by  men  who  give  you 
no  security  and  not  even  a  promise  to  divide  their  profits 
with  you^  and  whose  names  you  never  know,  and  can  never 
find  out.  Who  says  that  faith  is  extinct  in  the  Nineteenth 
Century  ? 

IV. WHO    PAYS    FOR    PROTECTION  ? 

Many  persons  are  persuaded  that  protective  duties  are 
either  not  taxes  at  all  or  else  are  all  paid  by  foreign 
producers.  A  western  schoolboy  declared  that  the  $200,- 
000,000  levied  by  the  tariff  were  all  paid  to  us  by  England; 
and  thousands  of  people,  who  ought  be  in  school,  believe 
the  same  thing. 

Let  us  look  at  this  point.  In  1881  the  duty  on  the  best 
plate  glass  was  112  per  cent.  Glass  of  this  kind,  selling  in 
Belgium  for  $386,000,  was  imported  here,  and  $437,000 
duty  was  paid  upon  it.  It  was  then  sold  here  for  over 
$850,000.  Who  paid  the  duty?  Did  the  Belgium  manu- 
facturer ?  If  he  did,  then  out  of  $386,000  which  was  all  he 
got  for  the  glass,  he  paid  $437,000  to  our  government  for 
the  privilege  of  sending  it  here.  In  other  words,  he  gave  us 
his  glass  for  nothing,  when  he  could  have  sold  it  at  home  for 
$386,000;  and  he  gave  us  $51,000  more  for  leave  to  do  so! 
On  several  articles  duties  were  paid  over  200  per  cent.  On 
this  theory  the  foreign  producer  gave  us  the  goods  for 
nothing,  and  paid  us  a  bonus  of  double  the  value  of  the 
goods  to  take  them  off  his  hands !  Let  any  one  believe  such 
nonsense  who  is  silly  enough  to  do  so. 

But  the  duties  on  some  things  are  so  heavy  that  they  are 
not  imported  at  all.  That  is  the  case  with  the  cheapest  kind 
of  woolen  goods,  used  by  the  poor.  The  duty  varies  from 


214  DOES  PROTECTION  PROTECT? 

115  to  200  per  cent.;  and  they  do  not  come  here.  The 
American  manufacturer  charges  70  to  100  per  cent,  more 
than  the  Englishman,  and  is  secured  against  competition. 
Who  pays  that  difference  ?  Not  the  Englishman,  because 
he  does  not  send  any  such  goods,  but  keeps  them  all  at 
home.  If  the  American  poor  man  who  wears  the  goods 
does  not  pay  it  no  one  pays  it.  But  the  American  manufac- 
turer gets  it  from  somebody. 

Nothing  can  be  more  absurd  than  such  a  theory.  Occa- 
si(jnally,  of  course,  a  foreign  manufacturer  pays  part  of  the 
duty,  when  he  happens  to  send  goods  in  a  bad  season  and 
they  sell  at  a  loss.  But  no  foreigner  is  so  foolish  as  to  send 
his  goods  constantly  to  be  sold  at  a  loss.  After  one  or  two 
losses,  he  keeps  his  goods  at  home  for  better  times.  The 
great  bulk  of  the  tariff  tax  is  paid  by  our  own  people. 

It  cannot  be  too  often  repeated  that  protective  taxes  are 
necessarily  ten  times  more  burdensome  to  the  poor  than  to 
the  rich.  No  man  can  pay  taxes  out  of  anything  except 
what  he  saves  out  of  his  income  after  paying  the  cost  of  his 
living.  If  it  costs,  without  taxes,  $400  a  year  to  support  a 
family  (and  that  is  all  that  nine-tenths  of  the  American  Jam- 
ilies  have  to  live  upon),  then  the  man  who  earns  $500  has 
$100  out  of  which  to  pay  taxes,  while  he  whose  income  is 
$50,000  has  $49,500  for  taxation.  The  present  system  of 
taxation  takes,  on  an  average,  about  $80  a  year  from  each, 
if  they  live  alike,  but  about  $3,000  from  the  richer  man  if 
he  spends  $15,000  a  year.  Thus,  from  every  $100  saved  by 
the  poor,  taxation  takes  $80.  From  every  $100  saved  by 
the  rich  and  luxurious  it  takes  $8.  From  every  $100  saved 
by  the  rich  and  stingy  it  takes  only  16  cents. 

V. WHO    CAN   BE    PROTECTED   BY   PROTECTION  ? 

Every  one  can  see  that  protection  against  foreign  competi- 
tion can  only  protect  those  who  are  exposed  to  such  competi- 
tion. No  one  can  ever  get  any  direct  benefit  from  protection 


DOES  PROTECTION  PROTECT? 


who  is  engaged  in  making  something  which  cannot  possibly 
be  made  abroad,  or  doing  something  in  America  which  can- 
not possibly  be  done  outside  of  America.  Thus,  domestic 
servants  cannot  get  any  benefit  from  the  system  because  our 
dinners  cannot  be  cooked  nor  our  houses  cleaned  by  people 
who  live  in  Europe.  House  builders  cannot  receive  any 
benefit  from  protection  because  a  three-story  brick  house,  all 
complete,  cannot  be  shipped  from  Europe,  just  yet.  Store- 
keepers cannot  be  protected  because  we  cannot  buy  our 
goods  at  retail  from  European  shops.  Farmers  growing 
wheat,  corn,  and  other  grain  cannot  be  protected  because 
this  country  raises  all  the  grain  that  it  needs  and  has  an 
immense  surplus  every  year  for  export.  A  little  grain 
comes  from  Canada,  but  only  to  those  parts  of  the  United 
States  which  are  nearer  to  Canada  than  to  the  great  grain- 
producing  States.  Railroad  builders  have  nothing  to  gain 
from  protection,  because,  although  rails  may  be  made  in 
England,  railroads  cannot  be  made  there  for  us.  No  one 
engaged  in  the  business  of  interior  transportation  can  be 
protected  because  nothing  can  be  carried  to  and  fro  in  our 
own  country  by  people  who  do  not  live  in  this  country.  The 
great  mass  of  manufacturers  cannot  be  protected  because 
their  work  could  not  possibly  be  done  anywhere  but  right 
here.  Professional  men,  such  as  ministers,  teachers,  doctors, 
lawyers,  and  the  like,  must  be  on  the  spot  in  order  to  render 
service;  therefore  protection  can  do  them  no  good.  Clerks 
and  all  salesmen  and  saleswomen,  dressmakers,  milliners  and 
all  persons  who  make  things  especially  to  order  or  to  fit  par- 
ticular persons,  can  derive  no  benefit  from  protection,  because 
their  work  could  not  be  done  anywhere  except  here.  Finally, 
all  persons  who  are  not  directly  engaged  in  the  production 
of  any  particular  article  for  sale,  including  nearly  all  women 
and  children,  can  get  no  benefit  from  protection,  because 
whatever  work  they  do  is  of  a  kind  which  could  not  be  done 
Anywhere  but  at  home. 


216  DOES   PROTECTION    PROTECT? 

Now,  leaving  out  all  these  classes,  there  are  not,  among 
the  54,000,000  of  people  of  the  United  States,  as  many  as 
500,000  who  can  possibly  derive  any  direct  benefit  from  tho 
taxation  called  "  protection."  But  even  this  number  has  to 
be  largely  reduced.  For  all  the  direct  benefit  of  protection 
goes  necessarily  to  the  employers  in  a  few  branches  of  pro- 
duction, namely,  the  manufacture  of  metals,  cotton,  woolen, 
and  silk  goods,  and  some  chemicals,  and  the  growing  of 
wool,  sugar,  rice,  and  hemp.  To  allow  50,000  employers  as 
engaged  in  these  branches  of  protection  would  be  an  exag- 
geration; for  the  census  shows  less  than  10,000  manufactur- 
ing concerns  under  these  heads;  but  still  I  am  willing  to 
concede  that  number.  This  is  the  outside  number  of  persons 
who  can  possibly  receive  any  direct  benefit  from  protection. 

The  whole  benefit  of  protection  consists  in  raising  the 
price  of  some  of  these  articles  by  preventing  foreign  goods 
of  the  same  kind  being  imported  in  such  quantities  as  to  cut 
down  the  price  and  reduce  the  quantity  which  will  be  made 
in  America.  Now,  of  course,  the  whole  profit  made  on  this 
advance  in  price  goes  in  the  first  instance  into  the  pockets  of 
the  employers.  When  the  goods  are  sold  it  is  not  the  work- 
men who  receive  the  price,  but  the  employers.  Thus  the 
direct  benefit  of  the  tariff  is  confined  exclusively  to  these  few 
employers.  I  know  it  is  said  that  their  profits  are  and  must 
be  divided  with  the  workmen  by  increasing  their  wages;  but 
all  that  I  call  attention  to  now  is  the  fact  that,  in  the  first 
instance,  the  whole  profit  of  the  tariff  necessarily  goes  to  the 
employers,  and  to  them  alone. 

VI. HOW    PEOTECTION    PROTECTS    WAGES. 

"We  have  now  come  in  due  order  to  the  great  point  which 
protectionists  make  on  behalf  of  their  system.  They  are 
never  weary  of  claiming  that  it  increases  wages.  The 
American  Protectionist  of  March  25,  1882,  says: 

"  DOES  PROTECTION  PROTECT  LABOR  ? — If  it  does  not  pro- 


DOES   PROTECTION    PROTECT?  217 

tect  labor  it  protects  nothing.  The  only  serious  difficulty  in 
the  way  of  our  manufacturers,  in  competing  with  their  for- 
eign rivals  is,  of  course,  the  price  they  are  compelled  to  pay 
their  workmen." 

Let  us  see,  then,  how  far  protection  increases  wages: 
1.  It  has  already  been  made  clear,  I  trust,  that  the  only 
way  in  which  protection  can  increase  wages  is  by  giving  to 
the  manufacturers  of  a  few  classes  of  goods  larger  profits, 
out  of  which  they  can,  if  they  choose,  pay  higher  wages. 
But  it  is  equally  clear  that  there  is  no  law  or  public  senti- 
ment which  compels  them  to  do  so.  They  pay  no  greater 
wages  than  they  are  obliged  to  do  by  general  competition 
among  employers.  When  the  amount  of  protection  is 
raised  they  do  not  increase  wages  because  of  that.  In  July, 
1882,  the  tax  on  imported  socks  and  other  knit  goods  was 
raised  from  35  per  cent,  to  80  per  cent.  Not  only  did  the 
manufacturers  of  these  goods  fail  to  increase  wages,  but 
within  four  months  afterwards  they  held  a  conference  for  the 
purpose  of  cutting  down  the  wages  of  their  workmen.  In 
1872  the  protection  on  iron,  wool,  and  cotton  goods  was 
reduced  10  per  cent.,  and  wages  were  raised.  In  1875  the 
protection  on  these  goods  was  raised  1 1  per  cent.,  and  wages 
were  reduced  that  same  year  and  for  four  years  thereafter. 
Early  in  1880  a  strong  attempt  was  made  in  Congress,  with 
fair  prospects  of  success,  to  reduce  the  duty  on  steel  rails 
from  $28  a  ton  to  $10.  While  this  was  agitated  the  steel 
rail  manufacturers  paid  their  workmen  higher  wages  than 
they  had  done  for  five  years  previously.  They  kept  up  these 
wages  until  a  new  Congress  was  elected  which  wa,s  known  to 
contain  a  majority  of  protectionists,  who  would  not  allow 
the  steel  rail  duty  to  be  materially  reduced.  Just  before 
that  Congress  assembled  the  steel-rail  manufacturers  gave 
notice  to  their  men  of  a  reduction  of  wages.  About  fifteen 
months  afterwards  another  attempt  was  made  to  reduce  the 
duty  on  steel  rails,  and  as  soon  as  that  was  defeated  the 
10 


218  DOES  PROTECTION  PROTECT? 

manufacturers  gave  notice  of  another  and  a  larger  reduction 
of  wages.  On  the  other  hand,  in  1879,  all  the  tax  on 
imported  quinine  was  suddenly  abolished.  So  far  from 
reducing  wages,  the  quinine  manufacturers  soon  afterwards 
increased  them,  and  largely  increased  their  own  production 
of  quinine.  These  are  facts ;  and  protectionists  are  never 
weary  of  telling  you  that  an  ounce  of  facts  is  worth  a  ton 
of  theory. 

Take  another  class  of  facts,  applicable  to  a  wide  range  of 
manufacturers.  The  highest  tariff  taxes  upon  iron  that  were 
ever  known  in  this  country  were  levied  from  1828  to  1840. 
During  that  period,  as  the  manufacturers  testified  before  a 
protectionist  committee  of  Congress,  they  made  no  increase 
of  wages  whatever.  Between  1840  and  1842  the  duties  on 
jron  were  reduced,  with  no  perceptible  effect  upon  wages.  In 
the  middle  of  1842  the  duties  were  more  than  doubled,  and 
remained  high  until  December,  1846.  Official  inquiries 
being  made  in  the  autumn  of  1845,  not  one  manufacturer 
pretended  that  he  had  increased  wages.  In  December,  1846, 
the  duties  were  cut  down  about  one-third,  and  so  remained 
until  July,  1857.  The  manufacturers  during  that  period 
very  largely  increased  wages  in  the  iron  trade  as  well  as  in 
every  other.  There  never  was  before,  and  there  never  has 
been  since,  so  rapid  an  advance  in  the  wages  of  manufactur- 
ing workmen  of  all  classes,  estimated  in  gold  value,  as 
between  1846  and  1860;  during  which  time  the  tariff  taxes 
were  lower  than  they  have  ever  been  at  any  other  time  since 
1812. 

2.  The  census  of  1880  shows  conclusively  that  the  high- 
est wages  are  paid  by  those  employers  who  are  not,  and  can- 
not be,  benefited  by  protection,  and  that  the  lowest  wages 
are  paid  by  the  protected  classes.  The  average  annual  wages 
of  all  the  persons  employed  in  manufactures  were  $346. 
The  average  wages  of  employes  in  the  protected  cotton  man- 
ufacture were  $244,  in  the  protected  woolen  manufacture 


DOES   PROTECTION    PROTECT?  219 

$293;  and  in  the  protected  silk  manufacture  $292;  all  being 
below  the  general  average.  On  the  other  hand,  the  average 
is  raised  by  the  high  wages  paid  in  innumerable  other 
branches  of  manufacture,  all  of  which  are  oppressed  and 
dragged  down  by  the  heavy  taxes  which  the  tariff  lays  upon 
their  raw  materials. 

Even  in  the  iron  manufacture,  where  women  and  children 
cannot  be  employed,  and  where,  therefore,  wages  average 
higher,  the  census  shows  that  the  average  wages  of  iron 
workers  were  only  $1.25  a  day,  while  the  unprotected  car- 
penters all  over  the  country  earned  from  $1.50  to  $2.50,  and 
even  farm  hands  earned  an  average  of  nearly  $1.50  per  day. 

Thus  the  census  returns  (which,  it  must  always  be  remem- 
bered, are  made  up  from  statements  of  the  manufacturers 
themselves,  whose  interest  it  is  to  show  a  different  state  of 
facts)  clearly  establish  that  the  more  protection  is  given  to 
any  class,  the  less  wages  that  class  pays  to  its  workmen. 

3.  But  it  is  constantly  said  that  at  any  rate  wages  in  this 
country  are  higher  than  in  England,  and  that  this  is  due  to 
protection. 

Now,  nothing  can  be  more  clear  than  that  protection  never 
helped  to  make  wages  higher  in  this  country  than  in  Eng- 
land, because  it  is  a  fact,  perfectly  well  established,  that  there 
was  more  difference  between  mechanics'  wages  in  England 
and  in  this  country  before  we  had  a  protective  tariff,  than 
there  is  to-day.  In  a  statement  made  to  the  tariff  commis- 
sion by  a  strong  protectionist,  who  manufactures  the  same 
goods  both  in  Ireland  and  New  Jersey,  he  admitted  that, 
under  our  present  stringent  protective  system,  the  wages  of 
the  workmen  whom  he  employs  in  his  American  factory 
have  been  steadily  going  down,  while  the  wages  of  the 
workmen  whom  he  employs  in  his  Irish  factory  have  been 
steadily  going  up. 

4.  While  it  is  true,  that  wages  generally  are  higher  in 
this  country  than  in  England,  it  is  not  true,  that  they  are 


220  DOES   PROTECTION    PROTECT? 

higher  in  all  the  protected  industries.  On  the  contrary,  one 
of  the  results  of  the  twenty-two  years  of  steady  protection, 
which  the  cotton  and  woolen  manufacturers  have  had,  has 
been  that  the  employers  have  finally  succeeded  in  cutting 
down  wages  in  this  country  below  the  rates  paid  in  England. 
An  official  report  on  these  manufactures,  issued  by  the  state 
department  in  October,  1882,  states  that  the  wages  paid  on 
an  average  in  England,  which  compared  with  those  paid  in 
America,  for  the  same  number  of  hours'  work,  show  the 
following  result  : 

WAGES  PAID  FOR  52  WEEKS  OF  64  HOURS  EACH. 

In  England.  In  America. 

Cotton  Manufactures,  $286  $244 

Woolen          «      •  294  293 

Thus  it  will  be  seen  that  already  protection  has  attained 
its  greatest  triumph,  and  accomplished  the  purpose  for 
which,  in  fact,  it  was  intended,  that  of  cutting  down  the 
wages  of  the  American  operative  to  a  point  lower  than  that 
of  the  Englishman.  But  even  these  figures  do  not  show  all 
that  has  been  accomplished.  For  they  show  the  English 
wages  in  1881,  and  the  American  wages  in  the  spring  of 
1880.  Since  that  time  American  wages  have  been  reduced, 
and  English  wages  have  been  raised. 

An  English  expert,  who  examined  the  whole  subject 
carefully  in  1879,  found  that  American  workmen  in  cotton 
mills  did  about  25  per  cent,  more  work  than  English  work- 
men  did  for  the  same  money. 

Surely  protection  has  been  an  incalculable  blessing  to  the 
poor  working  people  in  the  cotton  and  woolen  factories  of 
New  England  ! 

Of  course,  it  will  be  said  in  answer  to  all  this  :  "  Why  do 
English  workmen  come  to  the  cotton  and  woolen  mills  of 
this  country,  if  they  get  lower  wages  here  than  at  home  ?  " 
The  answer  is  very  simple.  They  do  not  come.  The  cotton 


DOES  PROTECTION   PROTECT?  221 

and  woolen  mills  import  Swedes,  Irish,  and  Canadians  ;  but 
the  English  emigration  stopped  long  ago  ;  and  thousands  of 
English  workmen,  who  were  attracted  by  the  higher  wages 
of  ten  years  ago,  have  already  gone  back  or  gone  into  other 
work. 

5.  But,  as  usual,  the  most  conclusive  answer  to  the  whole 
claim  made  for  protection  on  the  wages  question  is  to  be 
found  in  the  statements  of  the  protectionist  organs.  The 
New  York  Industrial  League,  the  largest  protectionist  organ- 
ization  outside  of  Pennsylvania,  employed  Mr.  Charles  S. 
Hill,  of  the  State  Department,  to  prepare  statistics  and  an 
address  for  the  Tariff  Commission.  In  this  document,  which 
was  endorsed  by  the  League,  and  triumphantly  published  by 
their  organ,  The  American  Protectionist,  it  is  explicitly  stated 
that  the  workmen  employed  by  American  manufacturers 
produce,  on  the  average,  100  per  cent,  more  than  those 
employed  by  English  manufacturers,  man  for  man.  It  is 
not  claimed,  even  in  this  paper,  that  American  wages  aver- 
age more  than  50  per  cent,  higher  than  English  wages,  all 
'round  ;  and  not  only  do  the  facts  already  stated  show  that 
there  is  no  such  difference,  but  even  the  report  of  that 
packed  and  bigoted  protectionist  body,  the  late  Tariff  Com- 
mission, admits  that  the  difference  between  English  and 
American  wages  in  cotton,  woolen,  linen,  and  silk  manufac- 
tures, is  very  small.  No  one  can  honestly  claim  that  manu- 
facturing wages  are,  on  the  average,  more  than  25  per  cent, 
higher  here  than  in  England.  If  then  our  workmen  pro- 
duce, man  for  man,  even  50  per  cent,  more  than  the  English, 
is  it  not  clear  that  wages  are  practically  25  per  cent,  cheaper 
here  than  in  England  ? 

There  is  no  doubt  that  this  conclusion,  startling  as  it  may 
seem,  is  entirely  correct.  This  is  a  country  of  hard  work. 
The  average  working  hours  of  an  English  workman  are  54 
to  56  a  week.  The  average  hours  of  American  workmen 
are  64  to  69  a  week.  The  same  class  of  merchants  that  in 


222  DOES   PROTECTION   PROTECT? 

England  attend  at  their  offices  on  an  average  six  or  seven 
hours  a  day,  with  a  half  holiday  on  Saturdays,  will  be  found 
at  their  offices  in  America  every  day,  Saturdays  included, 
for  ten  hours  in  the  dull  seasons  and  fifteen  hours  in  the 
busy  ones.  All  classes  of  business  men  here,  whether 
employers  or  employed,  work  harder  and  faster  than  the 
same  classes  in  England.  The  very  same  man  who  in  Man- 
chester cannot  be  persuaded  to  run  more  than  three  looms 
at  once,  will  manage  five  in  Lowell ;  and  he  who  in  Lanca- 
shire runs  five  looms,  will  run  eight  in  Fall  River.  For  this 
increase  of  60  per  cent,  in  their  work  they  get,  at  the  utmost, 
20  per  cent,  advance  in  their  wages.  It  is  a  well-known  fact 
that,  a  few  years  ago,  bricklayers  in  Lancashire  were  for- 
bidden by  their  trades-unions  to  lay  more  than  1,000  brick 
per  day,  and  that  the  same  men  came  to  New  York  and  laid 
easily  3,000  brick  per  day.  Their  New  York  employers 
paid  them  double  their  old  wages,  and  even  then  got  their 
work  practically  30  per  cent,  cheaper  than  the  English 
employers. 

VII. HOW    PROTECTION    PROTECTS    MANUFACTURERS. 

Protection  does  not  even  protect  the  manufacturers  as  a 
class.  It  cannot  possibly  protect  more  than  a  few.  Most  of 
the  manufacturers  know  that  it  does  nothing  for  them 
directly  any  more  than  for  farmers,  because  it  is  not  possible 
for  as  much  as  one-eighth  of  all  the  manufactured  goods 
that  we  use  to  be  manufactured  abroad.  In  1880  it  appears 
by  the  census  that  the  total  manufactures  of  this  country 
amounted  to  about  $5,400,000,000.  All  the  manufactures 
that  were  imported  from  abroad  in  the  same  year  did  not 
exceed  in  value  $300,000,000.  So  the  home  manufactures 
were  eighteen  time  as  large  as  the  imported  ones.  If  all 
tariffs  were  abolished  the  manufacturers  of  Europe  could 
not  possibly  send  us  more  than  twice  the  amount  which 
they  now  send;  and  all  the  rest  of  the  goods  that  we  want 


DOES  PROTECTION  PROTECT?          223 

would  have  to  be  made  here  just  as  they  are  now.  Indeed 
the  vast  mass  of  manufactured  goods  could  not  be  made 
anywhere  else.  Tariff  or  no  tariff,  our  flour  and  other  man- 
ufactures of  agricultural  produce  would  be  made  here,  and 
so  would  our  houses  and  furniture  and  most  of  our  clothes 
and  food.  There  are  not  factories  enough  in  the  world, 
outside  of  our  own  country,  to  make  all  the  iron  and  steel 
or  all  the  woolen  and  cotton  goods  that  we  need.  And  as 
not  more  than  one-eighth  of  the  manufactures  needed  by 
the  country  could  ever  be  imported,  it  follows  that  seven- 
eighths  of  the  manufactures  cannot  possibly  be  benefited  by 
protection. 

But  even  as  to  the  one-eighth  of  the  manufacturers  who 
think  they  are  benefited  by  protection,  they  are  almost 
always  mistaken.  They  have  to  pay  so  many  taxes  upon 
the  things  which  they  use,  that  the  higher  prices  which  they 
obtain  by  reason  of  protection  on  things  which  they  sell  are 
generally  of  no  profit  to  them. 

The  iron  manufacture  affords  one  of  the  very  best  illus- 
trations of  this  truth.  It  has  had  prosperous  periods  both 
under  low  tariffs  and  high  tariffs  ;  and  it  has  had  some  bad 
times  under  low  tariffs  ;  but  much  worse  times  under  the 
present  high  tariff.  Now,  whenever  the  present  high  tariff 
has  succeeded  in  shutting  out  foreign  iron,  which  is  the 
very  thing  for  which  the  tariff  was  created,  the  iron  manu- 
facturers have  been  nearly  ruined.  And  whenever  the 
American  iron  manufacturers  have  been  prosperous,  the 
quantity  of  foreign  iron  that  has  been  imported,  in  propor- 
tion to  the  whole  amount  used  in  the  country,  has  been 
larger  than  it  was  in  the  days  of  low  tariff.  Thus,  in  1860, 
the  tariff  tax  on  pig  and  scrap  iron  was  $2.50  to  $3  per 
ton  ;  and  the  importation  of  foreign  iron  was  only  8  per 
cent,  of  the  amount  made  here.  In  1880  the  tariff  tax  was 
$7  and  $8  ;  and  the  amount  imported  from  abroad  was  33 
per  cent,  of  the  amount  made  here.  Now,  there  were  five 


224  DOES   PROTECTION    PROTECT? 

or  six  years,  during  which  this  high  duty  was  maintained, 
in  which  the  importation  of  foreign  iron  was  cut  down  to 
almost  nothing  ;  but  during  all  those  years  the  iron  manu- 
facture was  in  a  most  depressed  and  miserable  condition  ; 
one-third  of  the  furnaces  being  closed,  and  half  the  work- 
men turned  adrift  without  any  wages  at  all. 

The  manufacture  of  woolen  goods  affords  another  illus- 
tration. It  has  always  been  grievously  injured  by  a  heavy 
tax  on  wool.  Woolen  goods  are  " protected"  (that  is, 
taxed),  by  a  duty  of  50  to  100  per  cent.;  but  wool  is  also 
taxed  at  about  the  same  rate,  and  machinery  used  in  the 
manufacture  is  taxed  45  per  cent.  Now,  it  is  impossible  to 
manufacture  first-class  real  woolen  goods  without  mixing  in 
them  more  or  less  of  foreign  wool.  American  wools  will 
answer  for  a  limited  class  of  purposes  ;  but  for  some  other 
purposes  they  are,  taken  alone,  of  no  good  at  all.  The  one 
great  reason  that  has  always  been  advanced  for  protecting 
our  woolen  manufactures  is  that  we  ought  to  keep  out  Eng- 
lish shoddy  goods.  The  result  of  protection  is  that  the 
woolen  manufacturers  of  this  country,  being  hindered  by 
protection  from  getting  real  wool,  use  more  shoddy  and 
cotton  in  place  of  wool  than  any  other  manufacturers  in 
the  world.  Real  woolen  goods  are  almost  unknown  here. 
First-class  cloth  is  not  made  here  at  all.  For  every  pound 
of  wool  in  American  woolen  goods,  there  is  an  average  of 
three-quarters  of  a  pound  of  cotton  and  shoddy.  There  is 
no  fraud  in  the  world  greater  than  American  cloth.  This 
is  shown  by  the  census  returns,  made  up  by  the  manufac- 
turers themselves. 

The  worsted  manufacture  was  created  in  this  country  by 
the  free  trade  tariff  of  1857,  which  gave  it  cheap  wool.  It 
was  killed  by  another  tariff,  increasing  the  duty  on  woolen 
goods,  but  increasing  it  on  wool  also.  It  was  finally  revived 
by  still  another  tariff,  which  gave  a  special  increase  of  duty 
on  worsted  goods.  But  the  worsted  manufacturers  them. 


DOES  PROTECTION  PROTECT?          225 

selves  admit  that  they  could  make  just  as  much  money 
without  any  tariff  on  their  manufactures  as  they  do  now,  if 
they  could  have  free  wool.  Consequently,  poor  people  all 
through  the  United  States  have  to  be  content  with  two  pairs 
of  stockings,  when  they  could  just  as  well  have  three,  in 
order  to  keep  up  a  protection  which  does  no  good,  even  to 
the  stocking  manufacturers. 

The  wool-growers  and  wool-manufacturers  agreed,  in  1867, 
upon  a  special  tariff,  which  they  framed  as  skillfully  as  they 
knew  how,  so  as  to  enable  them  both  to  rob  the  rest  of  the 
country  to  their  own  advantage.  This  tariff  raised  the  tax 
very  greatly  on  both  wool  and  woolens.  The  result  was  the 
immediate  destruction  of  several  branches  of  woolen  manu- 
factures, which  could  not  be  carried  out  without  Canadian 
and  other  foreign  wools.  This  was  followed  by  general 
depression  of  the  woolen  manufacture  for  six  years,  until 
1873,  and  then  absolute  ruin  for  the  next  six  years,  until  1879. 

Were  wool-growers  any  better  off  ?  Immediately  after 
the  passage  of  this  tariff  the  price  of  American  wool  fell 
in  the  market,  because  it  could  not  be  used  without  foreign 
wool,  and  the  farmers  slaughtered  their  sheep  by  millions. 
There  never  were  so  many  sheep  or  so  much  wool  raised  in 
this  country,  for  fourteen  years  after  the  adoption  of  this 
high  tariff,  as  there  were  in  the  year  before.  We  have  just 
now  got  back  to  the  point  in  wool  production  from  which 
we  started  in  1867.  But  more  than  that,  it  is  worth  while 
to  notice  how  we  got  back.  The  tariff  of  1867  was  passed 
entirely  at  the  instance  of  wool-growers  in  States  lying  east 
of  the  Missouri  and  north  of  the  Ohio  river.  There  are  not 
to-day  half  as  many  sheep  nor  half  as  much  wool  raised  in 
those  States  as  there  were  before  the  tariff  of  1867.  Two- 
thirds  of  the  sheep  now  raised  in  America  are  raised  in 
Texas,  New  Mexico,  Arizona,  and  California,  which  nobody 
thought  or  cared  about  in  1867  as  sheep  raising  districts, 
and  the  people  of  which  did  not  then,  and  do  not  now,  ask 


226  DOES  PROTECTION  PROTECT? 

for  protection.  Every  single  member  of  Congress,  from 
the  districts  which  raise  two-thirds  of  all  the  American  wool, 
would  consent  to-day  to  strike  off  the  duties  on  both  wool 
and  woolens.  But  the  people  of  New  York,  Vermont,  and 
Ohio,  who  are  raising  but  few  sheep  of  comparatively  trifling 
value,  insist  on  maintaining  this  tax  upon  themselves  and 
the  whole  country. 

A  large  manufacturer  in  New  York  lately  sent  me  word 
that  I  was  perfectly  right  in  principle,  but  that  his  business 
would  be  ruined  if  protection  were  abolished.  Knowing 
exactly  what  his  business  consisted  of,  I  calculated  the  bene- 
fit which  he  derived  from  the  tariff.  Nearly  everything 
that  he  uses  in  his  business  is  taxed  from  thirty- five  to 
forty-five  per  cent.  Not  a  single  thing  which  he  produces 
is  protected  by  a  duty  of  more  than  twenty- five  per  cent. 
Scarcely  anything  that  he  makes  could  ever  be  imported  if 
the  tariff  were  entirely  abolished.  He  is,  therefore,  in  fact 
about  twenty  per  cent,  worse  off  for  having  any  tariff  at 
all.  This  is  a  very  common  case  among  manufacturers. 
The  duty  on  their  machinery  is  forty-five  per  cent.  The 
articles  which  they  produce  with  that  machinery  are  often 
only  protected  by  duties  from  twenty-five  to  thirty-five  per 
cent.  So  with  machinery  itself;  while  the  protective  duty 
on  the  steel,  of  which  machinery  is  made,  is  sixty  per  cent., 
the  duty  on  machinery  is  only  forty-five  per  cent. 

Protection  that  will  really  protect  is  only  possible  on  con- 
dition of  limiting  it  to  a  very  few  specified  classes  of  manu- 
factures. Extended  to  everybody,  it  injures  all  and  benefits 
none.  But  it  is  impossible,  in  a  free  country,  to  maintain  a 
really  protective  tariff  of  this  nature.  So  much  jealousy 
would  be  excited  by  it,  that  it  would  soon  break  down.  The 
consequence  is,  that  all  that  we  have,  or  ever  can  have,  in 
the  way  of  protection,  consists  of  keeping  up  duties  which 
counterbalance  each  other,  with  the  result  of  establishing  a 
wildly  confused  system,  under  which,  by  lucky  chance  of 


DOES  PROTECTION  PROTECT?          227 

skillful  fraud,  a  few  manufacturers,  who  can  buy  their  way 
through  Congress,  derive  some  profit  at  the  expense  of  all 
the  rest  of  the  community,  and  especially  of  other  manufac- 
turers, who  help  them  to  sustain  a  tariff  under  the  delusion 
that  they  are  themselves  profiting  by  it. 

WOULD    FREE   TRADE    DESTROY    MANUFACTURING  ?  * 

The  census  of  1880  shows  that  the  manufactures  of  the 
United  States  were  worth,  in  that  year,  $5,370,000,000. 
Our  entire  importation  of  foreign  manufactures,  for  the 
same  year,  although  much  larger  than  usual,  amounted  to 
the  value  of  only  $300,000,000.  Even  if  we  add  fifty  per 
cent,  for  duties  and  freights,  that  would  only  make  the 
value  of  the  foreign  goods  used  here  450  millions,  against 
5,400  millions  of  domestic  goods;  thus  showing  that  only 
one -thirteenth  of  all  the  manufactures  used  here  came  from 
abroad.  These  came  almost  exclusively  from  England, 
France,  Belgium,  and  Germany,  and  chiefly  from  England. 
Now,  in  average  years,  each  of  those  countries  exports  to 
other  countries  more  than  ten  times  as  much  as  it  sends  to 
the  United  States.  For  several  years  before  1880,  they 
sent  only  one-fifteenth  of  their  exports  to  us.  In  1880,  they 
sent  about  one-eighth;  and  this  sudden  increase  raised  prices 
with  them  so  greatly  that  they  could  not  supply  half  our 
demands.  Their  total  exports  of  all  things,  to  all  countries, 
in  1880,  amounted  to  only  about  3,000  millions.  If,  there- 
fore, they  had  poured  all  the  things  which  they  produced 
upon  us,  abandoning  commerce  with  all  the  rest  of  the 
world,  they  could  not  have  supplied  us  with  half  the  things 
that  we  need;  and  where  would  prices  have  gone  to  under 
such  circumstances  ?  The  whole  idea  is  absurd.  It  would 
be  impossible  for  all  Europe  to  spare  us  750  millions7  worth 
of  manufactured  goods  within  the  next  twelve  months  if 
our  whole  tariff  were  abolished  to-morrow.  This  would 

*  By  Thomas  G.  Shearman,  Esq.,  of  New  York.    Issued  by  Free  Trade  Club. 


228  DOES  PROTECTION  PROTECT? 

not  be  enough  to  supply  the  place  of  one-ten tli  of  our  manu- 
factures, because  we  now  take  300  millions'  worth  from 
Europe,  and  yet  need  all  the  factories  that  we  have. 

Again,  we  import  scarcely  anything  from  Europe  in  an 
entirely  finished  state.  At  least  nine-tenths  of  all  manu- 
factured articles  that  we  take  from  Europe  consist  of  goods, 
to  be  made  up  by  manufacturers  here.  European  manu- 
facturers do  not  and  cannot  make  our  clothes,  furniture,  and 
other  supplies  for  actual  use,  to  any  great  extent.  If  our 
manufactures  stopped,  the  importations  would  stop  at  once. 
European  manufacturers  sell  almost  exclusively  to  manu- 
facturers here,  so  far  as  they  sell  to  America  at  all.  Pottery 
is  almost  the  only  important  exception  to  this  rule;  and  that 
is  only  a  trifling  item.  The  official  report  for  1881  shows 
that  less  than  $40,000,000  worth  of  goods  ready  for  use 
were  imported  from  Europe  (including  books,  but  not  liquors 
and  cigars),  being,  as  already  stated,  less  than  one-seventh 
of  the  imported  manufactures,  and  less  than  one-six- 
teenth of  all  the  imports.  It  is  therefore  impossible  that 
free  trade  should  shut  up  our  manufacturing  establish- 
ments, because  those  are  practically  the  only  customers  for 
foreign  manufacturers. 

And  from  this  fact  it  will  be  seen  what  folly  it  is  to 
"protect"  our  manufacturers  by  taxing  the  very  things 
which  they  need  as  materials  for  manufacture.  Materials 
cost  sixty  or  seventy  per  cent,  of  the  whole  outlay  of  Amer- 
ican manufacturers.  Manufacturers  and  mechanics  import 
nine-tenths  of  ail  the  foreign  manufactures  which  come  into 
the  country,  and  yet  think  it  necessary  for  their  own  protec- 
tion to  make  their  own  materials  cost  forty  or  fifty  per  cent, 
more  than  the  English  manufacturer  pays  for  the  same 
things. 

The  truth  is  that  the  tariff,  winch  is  commonly  supposed 
to  be  the  mainstay  of  our  manufacturing  industries,  is  their 
greatest  burden.  It  takes  more  money  out  of  the  pockets 


DOES    PROTECTION    PROTECT  ?  229 

of  manufacturers  than  of  any  other  class.  Its  "fostering 
influence  "  strangles  more  manufacturing  industries  than  it 
helps.  Look  at  a  few  figures.  In  1881,  the  total  importa- 
tion of  iron  was  valued  at  $33,000,000.  Of  this  amount, 
only  $75,000  consisted  of  goods  which  are  described  in  the 
official  list  as  fit  for  family  use.  $2,500  worth  were  used 
for  ship  supplies.  Chains,  to  the  value  of  $110,000,  might 
possibly  be  used  by  farmers  without  further  manufacture. 
Railroad  bars  and  supplies  amounted  to  the  value  of  $4,- 
120,000.  All  the  rest,  so  far  as  can  be  ascertained,  consisted 
of  articles  used  exclusively  for  manufacturing  purposes,  of 
the  value  of  over  $28,000,000.  And,  which  is  the  most 
absurd  feature  of  all,  more  than  $24,000,000  of  the  whole 
$33,000,000  were  used  exclusively  in  the  home  manufacture 
of  iron  itself!  Thus,  out  of  the  $12,000,000  taxes  laid  on 
imported  iron,  the  iron  manufacturers  themselves  paid 
about  $9,000,000,  showing  that  the  tariff  did  them  at  least 
three  times  as  much  harm  as  good.  And,  reckoning  the 
construction  of  railroads  as  a  branch  of  manufacture,  as  it 
is,  about  ninety-nine  per  cent,  of  the  whole  tax  on  iron  was 
taken  from  manufacturers  of  some  sort.  But,  even  exclud- 
ing railroad  builders,  eighty-five  per  cent,  of  the  whole  tax 
was  paid  by  manufacturers. 

Take  steel.  It  was  imported  in  1881  to  the  value  of 
nearly  $18,500,000,  and  paid  $9,347,000  for  duties.  All 
the  articles  enumerated  in  the  official  list,  which  could  be 
used  for  any  other  than  manufacturing  purposes,  were 
cutlery,  fire-arms,  and  skates,  valued  at  $3,157,000,  and 
paying  a  tax  of  $1,304,000.  Thus  seven-eighths  of  the 
taxes  on  steel  fell  upon  constructive  industry. 

Tin  paid  $4,195,000  in  taxes,  of  which  $4,148,000  were 
paid  by  tin  manufacturers  themselves. 

Wood  paid  $1,536,000,  of  which  $1,145,000  fell  upon 
wood  manufacturers. 

Wool  and  woolen  goods  paid  $27,285,000  taxes,  of  which 


230 


only  $2,673,000  were  paid  on  finished  goods,  such  as  carpets, 
blankets,  hosiery,  and  clothing,  ready  for  actual  use.  Man- 
ufacturers, including  tailors,  paid  about  $24,612,000,  or 
over  nine- tenths  of  the  whole  tax. 

Taking  these  branches  of  manufacture  together  (and  they 
are  among  the  most  clamorous  for  "  protection  "),  we  find 
that  the  total  amount  of  duties  imposed  upon  them  for  pro- 
tective purposes,  in  1881,  was  $54,478,878,  of  which  over 
$50,000,000  were  paid  by  manufacturers  themselves,  includ- 
ing railroad  builders,  or  nearly  $43,300,000,  excluding  rail- 
road builders.  Thus  the  figures  prove  the  truth  of  our  first 
statement,  that  nine-tenths  of  the  burden  of  protection  falls, 
in  the  first  instance,  upon  manufacturers  and  mechanics. 

And  yet  we  are  constantly  told  that  nothing  but  this  sys- 
tem of  taxation  keeps  these  very  manufacturers  employed, 
and  that,  if  we  cease  to  heap  taxes  of  forty,  fifty,  and  one 
hundred  per  cent,  upon  the  materials  which  they  use  in  their 
shops,  those  shops  will  instantly  close  and  the  whole  country 
go  to  ruin.  Never  was  greater  nonsense  offered  in  the  name 
of  argument. 


CHAPTER  XIV. 

THE  NECESSARY  FOUNDATIONS  OF  INDIVIDUAL 

AND  NATIONAL  WELL-BEING,  AND 

OF  CIVILIZATION. 

BY  HENKY  CAEEY  BATED.* 


"THERMIT  me  to  direct  your  attention  this  evening  to  the 
I        theme,  The  Necessary  Foundations  of  Individual  and 
National  Well-Being,  and  of  Civilization. 

UNSETTLED    CONDITION    OF    POLITICAL    ECONOMY. 

To  hear  a  certain  school  of  political  economists  and  thei* 
followers,  here  and  in  England,  dogmatically  lay  down  the 
law,  and  even  insist  that  the  case  was  closed,  one  would 
hardly  imagine  that  their  dogmatisms  came  within  a  depart- 
ment of  knowledge  in  which  nothing  whatsoever  was  placed 
beyond  dispute.  But  in  political  economy  not  even  the 
definition  of  a  single  important  word — political  economy 
itself,  for  instance — is  settled.  In  1844,  De  Quincey,  a 
believer  in  Ricardo's  Theory  of  Rent,  one  of  the  orthodox 
principles,  said  of  political  economy:  "  Nothing  can  be  postu- 
lated, nothing  can  be  demonstrated,  for  anarchy  even  as  to 
the  earliest  principles  is  predominant." 

Nothing  is  to  be  taken  for  granted.  This  fact  cannot  be 
too  distinctly  impressed  upon  your  minds  and  memories. 
The  professors  are  not  even  agreed  as  to  whether  it  is  a 

*  Extract  from  Lecture  delivered  before  the  Brooklyn  Revenue  Reform  Club. 
February  28,  1883. 

(231) 


232  NECESSARY    FOUNDATIONS. 

science  or  an  art,  or  a  combination  of  both,  or  upon  the 
proper  and  legitimate  range  of  the  subject.  Therefore  is  it 
that  they  are  ab  initio  morally  debarred  from  the  practice  of 
dogmatism;  and  yet  with  all  of  these  causes,  impelling 
toward  modesty,  the  average  political  economist  is  seemingly 
more  confident  in  his  opinions,  and  certainly  more  overbear- 
ing and  arrogant  in  the  expression  of  them,  than  any  other 
manner  of  man  to  be  found  in  any  community.  Among  the 
believers  in  England  in  what  arrogates  to  itself  the  name  of 
free  trade — merely  free  foreign  trade — for  instance,  disbelief 
in  this  fetich,  is  regarded,  ipso  facto,  as  an  evidence  of  such 
ignorance  in  the  disbeliever,  that  it  is  considered  as  useless 
as  it  is  hopeless  to  argue  the  question  with  him;  and  he  is 
then  and  there  put  down  with  the  expression  of  opinion  that 
the  argument  is  complete  and  the  question  decided,  and  that 
he  is  an  ignoramus  if  he  does  not  know  and  recognize  these 
facts.  It  need  hardly  be  urged  that  this  is  not  the  spirit  in 
which  to  approach  the  investigation  of  truth.  Indeed,  the 
existence  of  this  spirit  is  proof  conclusive  that  these  philoso- 
phers and  their  followers  lack  full  faith  in  the  truth  of  the 
doctrines  which  they  would  thus,  without  reason,  force  upon 
the  acceptance  of  mankind. 

For  myself,  coming  here  as  I  do,  a  believer  in  and  a 
representative  of  that  noblest  of  all  the  sciences,  the  scientia 
scientiarum,  the  American,  or,  if  you  please,  the  Pennsylvania 
System  of  Social  Science,  founded  by  my  late  kinsman, 
Henry  C.  Carey,  I  have  emphatically  to  say,  that  I  come  not 
as  an  apologist  for  protection,  or  for  the  science  upon  which 
it  rests.  I  stand  not  on  the  defensive;  but  I  assume  the 
aggressive.  This  aggression  shall  strike  at  the  very  roots  of 
the  system  of  political  economy,  the  " dismal  science"  of 
Carlyle,  or  more  properly  of  Robert  Southey,  upon  which  is 
built  the  huge  and  arrogant  superstructure  falsely  denomi- 
nated free  trade;  and  I  shall  do  this  at  the  outset  of  my 
discourse. 


NECESSARY   FOUNDATIONS.  233 

THE    PENNSYLVANIA    SYSTEM    OF    SOCIAL    SCIENCE. 

How  is  it  with  the  Pennsylvania  system  ?  Has  it  been 
content  with  theories  based  on  assumptions,  or  has  it 
examined  facts  and  analyzed  the  movements  of  society,  and 
from  these  developed  laws?  It  has  given  us  the  true  law  of 
the  occupation  of  the  earth,  and  that  of  population,  both 
based  upon  the  observation  of  facts,  the  law  of  value,  which 
latter  is  not  found  in  the  cost  of  an  article,  but  in  that  of 
reproduction,  value  being  a  measure  of  the  resistance  to  be 
overcome  in  getting  possession  of  the  thing  desired.  Thus, 
with  all  improvements  in  modes  of  production,  existing 
things  decline  in  value  compared  with  man,  labor  becomes 
more  efficient;  and  a  larger  proportion  of  a  larger  product 
goes  to  labor,  whose  lot  thereby  becomes  in  all  advancing 
communities  a  steadily  improving  one.  This  law  of  dis- 
tribution is  one  which  introduces  both  harmony  and  happi- 
ness into  the  future  of  the  human  race. 

ASSOCIATION. 

But  the  fundamental  law  of  this  system,  the  one  which 
lies  at  the  basis  of  all  society,  the  most  important  condition 
governing  man,  still  remains  to  be  stated;  and  is  so  self- 
evident  that  its  statement  alone  is  necessary  to  carry  con- 
viction as  to  its  truth,  and  its  far-reaching  effects,  to  every 
candid,  unbiased,  and  intelligent  mind.  "  Man,  the  molecule 
of  society,"  says  Carey,  "is  the  subject  of  social  science. 
Like  all  other  animals,  he  requires  food  and  sleep;  but  his 
greatest  need  is  that  of  association  with  his  fellow-men. 
Born  the  most  helpless  of  animals,  he  requires  the  largest 
care  in  infancy.  Capable  of  acquiring  the  highest  degree  of 
knowledge,  he  is  yet  destitute  of  the  instinct  of  the  bee,  the 
beaver,  and  other  animals.  Dependent  for  all  his  knowledge 
on  the  experience  of  himself  or  others,  he  needs  language 
for  the  interchange  of  thought;  and  there  can  be  no  lan- 
guage without  association.  Isolate  him  and  he  loses  the 


284  NECESSARY   FOUNDATIONS. 

power  of  speech,  and  with  it  the  reasoning  faculty;  restore 
him  to  society,  and  with  the  return  of  speech  he  becomes 
again  the  reasoning  man." 

Here  is  the  pivotal  point,  the  controlling  law  of  man's 
existence,  no  one  being  sufficient  unto  himself;  and  the 
further  he  advances  in  culture  and  civilization  the  greater 
his  dependence  upon  his  fellow-men,  this  dependence  being 
in  fact  at  once  a  measure  and  a  test  of  his  civilization.  In 
the  early  stages  of  society,  and  in  isolated  communities,  there 
is  but  little  societary  life;  and  there  man  is  dependent  upon 
a  comparatively  few  people;  while  in  a  city  like  London, 
Paris,  New  York,  or  Philadelphia,  there  are  many  thousands 
of  individuals,  each  of  whom  daily  calls  for  the  services  of 
millions  of  men.  Indeed,  there  are  few  persons  here  present 
who  do  not  do  this — the  purchaser  of  a  copy  of  the  Herald, 
Tribune,  or  Sun,  thereby  calling  for  the  services  of  the 
millions  of  men  who  have  in  any  way  contributed  to  the 
production  of  one  of  these  papers,  even  so  remotely  as  by 
making  the  materials  of  which  the  railroads  or  telegraphs 
have  been  constructed — by  means  of  which  the  raw  materials 
and  news  have  been  conveyed — all  the  way  through  from 
the  smelters  of  the  metals,  in  the  machinery  used  in  its 
production,  to  the  makers  of  the  paper  and  the  type,  and  to 
the  compositors,  pressmen,  editors,  etc. 

That  there  may  be  association  there  must  be  differences 
among  those  composing  a  community,  and  the  greater  these 
differences  the  more  instant  the  demand  for  labor  power,  the 
most  perishable  of  all  commodities,  which  must  be  consumed 
on  the  instant  of  its  production,  or  it  is  lost  forever.  The 
measure  and  test  of  the  power  and  wealth  of  any  community 
or  country  is  found  in  the  proportion  of  its  labor  power 
which  is  not  wasted — more  being  wasted  in  every  country 
than  is  utilized. 

"The  more  imperfect  a  being,"  says  Goethe,  "the  more 
do  its  parts  resemble  each  other,  and  the  more  do  the  parts 


NECESSARY   FOUNDATIONS.  235 

resemble  the  whole.  The  more  perfect  a  being,  the  more 
dissimilar  are  the  parts.  In  the  former  case,  the  parts  are 
more  or  less  a  repetition  of  the  whole;  in  the  latter  they  are 
totally  unlike  the  whole.  The  more  the  parts  resemble  each 
other,  the  less  is  the  subordination  of  one  to  the  other, 
subordination  of  parts  indicating  a  high  grade  of  organiza- 
tion." "Life  being  a  mutual  exchange  of  relations,"  says 
Carey,  "  where  difference  does  not  exist,  exchanges  cannot 
take  place;  and  the  development  of  individuality  has  ever 
been  in  the  ratio  of  the  power  of  man  to  combine  with  his 
fellow-men." 

THE    NECESSITY    FOR     DIVERSIFIED    INDUSTRIES. 

Just  here  and  for  these  reasons,  as  may  well  be  seen, 
comes  in  the  imperative  necessity  for  diversified  industries, 
without  which  no  country  is  now,  nor  has  it  ever  been  rich, 
because  of  its  great  waste  of  labor  power,  and  in  exact 
proportion  to  this  diversification  of  industries  is  a  country 
rich,  powerful,  and  independent.  Let  us  not  be  diverted 
from  the  contemplation  of  this  great  fact  by  the  mere  dis- 
cussion of  prices,  which  only  befogs  the  case — an  article 
bought  abroad  being  dear  at  any  price,  when  the  labor  is 
being  wasted  at  home,  which  could  and  would  have  produced 
it,  had  it  not  thus  been  bought.  Thus  is  it  that  agriculture 
can  only  flourish  where  the  plow>  the  loom,  and  the  anvil, 
work  in  harmony,  the  one  with  the  others ,  Without  con- 
sumers near  the  farm  the  productions  of  the  latter  must  be 
limited  to  those  few  articles,  such  as  wheat,  corn,  rye,  cotton, 
tobacco,  etc.,  which  will  bear  transportation  to  a  distance, 
and  which  are  so  exhausting  to  the  soil,  and  made  still  moro 
so  by  being  consumed  away  from  the  farm;  thus,  while  the 
farmer  is  being  ground  under  the  tax  of  transportation, 
there  can  be  no  proper  rotation  o>f  crops,  and  the  result  to 
the  soil  in  this  country,  and  especially  in  the  South,  is  such 
that  the  Hon.  Chas.  J.  Faulkner  of  Virginia,  felt  constrained 
in  1858  to  say: 


236  NECESSARY  FOUNDATIONS. 

' '  During  the  past  summer  I  heard  an  opinion  expressed  by  Pro- 
fessor Henry,  the  distinguished  Secretar}7"  of  the  Smithsonian 
Institute,  which  struck  me  at  the  moment  as  extravagant,  but 
which  a  little  reflection  satisfied  me  was  founded  upon  the  strong 
probabilities  of  truth.  It  was  that  there  was  more  wealth  invested 
in  our  soil  in  fertilizing  matter  at  the  moment  this  continent  was 
discovered  by  Columbus,  than  there  is  at  present  above  the  surface 
in  improvements  and  all  other  investments.  .  .  .  The  fertility 
which  ages  had  accumulated  upon  its  surface  has  been  the  capital 
upon  which  the  farmer  has  been  drawing  with  reckless  prodigality 
from  the  first  settlement  of  the  country." 

Only  with  a  diversification  of  employments,  and  when  the 
consumer  is  brought  to  the  side  of  the  producer,  and  the 
power  of  association  thus  becomes  great,  and  wealth  in- 
creases, is  it  that  the  richer  soils  are  brought  under  cultiva- 
tion. When  these  industries  decline,  men  are  driven  back 
from  the  richer  to  the  poorer  soils,  as  in  India,  Turkey,  and 
Ireland;  and  only  in  purely  agricultural  countries  is  it  that 
famines  take  place.  These  really  result  not  from  an  absence 
of  food,  but  from  want  of  the  means  of  procuring  it.  In 
1847,  during  the  famine  in  Ireland,  from  which  one  million 
of  people  perished,  Ireland  was  still  a  large  exporter  of  food 
to  England.  That  unhappy  country  is  kept  in  a  chronic 
state  of  pauperism,  anarchy,  and  barbarism  because  of  an 
absence  of  diversified  industries,  and  of  the  power  of  associ- 
ation, which  can  come  from  them  alone. 

THE    PART    PLAYED    BY    GREAT    INDUSTRIES    IN    THE    SOCIAL 
ECONOMY. 

Every  important  industry  existing  in  a  country  becomes 
incorporated  into,  and  a  part  of  the  very  marrow  and  text> 
ure  of  the  societary  life  of  that  country;  acting  like  a  prime 
mover,  or  rather  like  a  great  heart,  giving  and  receiving  at 
every  moment,  at  every  pulsation,  new,  invigorating  and 
regenerating  life  and  power.  The  animal  organism  has  but 
one  heart,  but  the  societary  one  may  be  said  to  have  as 


NECESSARY    FOUNDATIONS.  237 

many  as  there  are  important  industries  in  it;  and  as  these 
industries  increase  in  number,  these  great  hearts  also  in- 
crease in  number,  and  as  they  gain  in  vigor  they  impart  this 
vigor  to  society,  which  is  but  another  name  for  ASSOCIATION 

to  which  these  industries  are  as  necessary  as  are  the  heart 

and  the  circulation  of  the  blood  to  the  animal  organism. 

So  great,  so  complicated,  so  far-reaching  are  the  ramifica- 
tions of  the  effects  of  the  pulsations  of  these  great  industrial 
hearts  to  society,  that  thoroughly  and  completely  to  "analyze 
and  follow  up  the  ebb  and  flow  from  and  to  one  of  them,  is 
beyond  the  power  and  capacity  of  the  human  mind.  Per 
mit  me,  however,  for  a  few  moments  to  direct  your  attention, 
inadequately  though  it  be,  to  some  of  these  phenomena  con- 
nected with  a  single  industry  in  giving  motion  and  life  to 
society.  I  refer  to  the  American  Bessemer  steel-rail  manu- 
facture, at  once  the  crown  and  glory,  and  the  practical  vindi- 
cation of  the  protective  policy  in  the  United  States  within 
the  past  decade  and  a  half,  and  the  true  and  unerring  guide  to 
national  industrial  legislation — Professors  Perry  and  Sumner, 
and  those  great  statesmen  in  Congress,  Messrs.  Beck,  Carlisle, 
Tucker,  and  Morgan,  to  the  contrary  notwithstanding. 

The  rail-roller  in  a  Bessemer  rail  mill,  who  receives  the 
steel  in  order  to  heat  it  and  put  it  through  the  rolls,  receives 
therefor  wages  which  he  expends  for  fuel,  food,  clothing, 
shelter,  etc.  This  expenditure  gives  vitality  to  the  business 
of  the  butcher,  the  baker,  the  miller,  the  dry -goods  dealer, 
the  coal  dealer,  etc.,  etc.,  and  to  the  investment  of  the  owner 
of  real  estate,  and  through  these  several  persons  to  the 
farmer  who  raises  cattle,  sheep,  wheat,  rye,  corn,  vegetables, 
milk,  butter,  fruit,  etc. ;  to  the  coal  operator  and  thence  to 
his  miners  and  laborers;  the  raisers  of  horses  and  mules, 
and  the  feed  for  these  latter ;  to  railroads  and  other  carriers, 
thence  to  the  manufacturers  of  cotton  and  woolen  fabrics 
and  their  workmen,  and  the  producers  of  raw  cotton  and 
wool;  the  importers  of  tea,  coffee,  and  sugar,  and  the  re- 


238  NECESSARY    FOUNDATIONS. 

fmers  of  this  latter;  and  from  all  of  these  back  and  through 
each  other,  in  a  ceaseless  round  of  acts  of  association,  the 
threads  of  the  multitudinous  ramifications  of  which  it  is  as 
impossible  to  gather  and  trace  as  would  be  an  attempt  to 
count  the  sands  on  the  sea-shore. 

Here  I  have  merely  attempted  to  indicate  the  direction  in 
which  we  may  look  in  order  to  analyze  these  movements, 
and  nothing  more;  beginning  and  ending  with  the  roller  of 
rails,  not  attempting  to  go  through  the  same  process  with  the 
owner  of  the  Bessemer  works;  the  men  who  have  made  the 
steel  itself;  the  bricklayers,  carpenters,  iron  and  steel  work- 
ers, laborers,  etc.,  who  have  built  these  works;  the  lumber- 
men and  brick-makers  who  have  furnished  materials;  the 
manufacturers  who  have  produced  the  pig  iron,  the  miners 
and  quarrymen  who  have  furnished  the  iron,  coal,  and  lime- 
stone; the  transporters  of  all  these  materials,  and  countless 
others  who  have  more  or  less  labored  with  mind  and  body 
to  start  and  keep  in  motion  this  great  industry,  and  those 
others  on  which  it  has  drawn,  and  the  other  millions  of  men, 
women,  and  children  who  have  in  one  way  or  another  minis- 
tered to  their  wants. 

THE    ENTIRE    COST    OF    SUCH    RAILS 

as  these  is  but  a  utilization  of  labor  which  would  have  gone 
to  waste,  or  of  raw  materials  which  would  have  had  no 
value  but  for  this  industry — coal,  for  instance,  in  the  ground 
on  an  undeveloped  tract  not  being  worth  one  cent  a  ton. 
The  commerce  which  is  set  in  motion  by  such  an  industry  is 
in  the  aggregate  many  times  as  large  as  its  own  volume, 
thereby  assisting  millions  of  men  in  the  work  of  complying 
with  the  paramount  and  controlling  condition  of  their 
nature,  and  upon  which  their  prosperity,  civilization,  and 
happiness  depend, — that  of  association, — exchanging  com- 
modities, services,  and  ideas  with  their  fellow-men.  Trans- 
fer the  present  demand  for  this  commodity  to  Great  Britain, 


NECESSARY   FOUNDATIONS.  289 

and  to  it  also  is  transferred  the  power  of  association  which 
accompanies  it,  involving  thereby  a  decline  in  the  demand 
for  American  services,  commodities,  and  ideas,  and  of 
national  wealth  and  power. 

This  analysis,  inadequate  though  it  be,  in  showing  the 
wide  dissemination  of  the  vitalizing  influences  which  flow 
from  a  magnificent  industry  such  as  this,  at  least  exposes  the 
utter  absurdity  of  the  narrow,  fallacious,  and  malignant 
attacks  of  the  free  foreign  trader  when  he  treats  such  indus- 
tries wholly  and  solely  as  means  of  enriching  the  heads  of 
the  concerns,  and  them  only.  A  practical  illustration  of  how 
general  is  the  benefit  which  flows  from  such  industries,  how 
thorough  the  solidarity  of  great  interests,  is  found  in  the 
fact  that  the  whole  of  the  last  annual  dividends  of  the  Penn- 
sylvania Railroad  Company — of  $6,890,000 — are  more  than 
represented  in  the  sums  paid  to  that  company  by  four  Besse- 
mer steel  and  iron  manufacturing  works  on  the  line  of  the 
road,  for  freights. 

THE    FAKMEE    AS   AN   EXTORTIONER. 

But  practically  the  greatest  extortioner  in  the  land  under 
this  theory,  with  the  present  protective  tariff,  is  the  farmer, 
who  has  made  us  more  independent  of  the  rest  of  the  world 
than  any  other  American  producer,  and  for  this  very  reason, 
and  who  for  the  crops  of  1881  levied  taxes  upon  his  poor 
and  unfortunate  victims  as  in  the  table. 

Here  is  extortion  for  you!  Only  $1,780,000  of  duties 
collected  by  the  Government,  and  $264,000,000,  or  one 
hundred  and  fifty-five  times  as  much  taxation,  levied  upon 
the  people  by  the  farmer  !  Had  I  selected  the  crops  of 
these  products  in  1880,  which  were  nearly  one-third  larger, 
although  they  produced  $128,000/000  less,  absurd  as  it  may 
appear,  I  should  have  been  able,  by  following  the  logic  of 
Prof.  Perry,  to  have  shown  an  extortion  of  $88,000,000 
greater ! 


240 


NECESSARY    FOUNDATIONS. 


Table  showing  the  amount  of  imports  and  domestic  productions  of 
Cereals  a,nd  Potatoes  for  the  year  1881,  with  duties  and  amounts 
paid  into  the  Treasury,  with  the  amount  of  bounties  paid  to  the 
farmer. 


ARTICLES. 

Quantity 
Imported. 

Rate 
of  Duty. 

Revenue 
received  by 
Government. 

Home 
Products. 

Enhanced 
Amount 
Paid  to  Farmer 
Monopolists. 

Corn,  
Wheat  

Bushels. 
75,162 
10,583 

Per  Bu. 
lOc. 
20c. 

$7,516.20 
2  116.66 

Bushels. 

1,194,916,000 
383  280,090 

$119,491,600.00 
76  (556  018  00 

Oats,  
Barley,  

65.276 
9,590,938 

lOc. 
15c 

6,527.68 
1,438  640.80 

416,481,000 
41  161  330 

41,648,100  00 
6  774  190  50 

Rye,  
Buckwheat,.  .. 
Potatoes,  

4,680 
4,159  1 
2,168,049 

15c. 
10  p.  c.  = 
407c. 
15c. 

702  00 
j-           198.83 
325,207.46 

20,704,950 
9,486,200 
109,145,494 

3,105,742.50 
386,088.34 
16,371,824.10 

$1,780,909.63 

$264,433,563.44 

AMERICAN    BLANKETS. 

Prof.  Perry  makes  a  strong  case  against  the  American 
producer  of  blankets,  but  this  is  readily  explained  when  you 
remember  that  my  very  able  friend,  Prof.  Denslow  of 
Chicago,  exhibited  to  you  here  some  weeks  ago  an  English 
and  an  American  blanket,  the  former  invoiced  at  seventy- 
nine  cents  a  pound  in  England,  and  the  latter,  quite  equal  in 
quality,  worth  seventy-eight  cents  in  Chicago.  Thus  is  it 
that,  having  so  nearly  achieved  industrial  independence  in 
the  article  of  blankets  that  Prof.  Perry  is  enabled  to  figure 
out  a  tax  on  the  consumer  of  $1,058,000,  while  the  Govern- 
ment only  got  $1,058  in  duties.  Had  the  price  of  American 
blankets  been  double  what  it  was,  and  the  domestic  supply 
but  one-tenth,  the  extortion  would  have  been  but  one-tenth. 
This  glorious  muddle,  by  virtue  of  which  the  cheaper  a 
domestic  product  and  the  more  it  is  enabled  to  drive  qut  the 
foreign  the  greater  the  extortion,  is  indeed  a  profound  prin- 
ciple of  social  philosophy,  and  one  which  is  deservedly  made 
the  guiding  star  of  the  Becks,  the  Coxes,  the  Morrisons,  the 


NECESSARY   FOUNDATIONS.  241 

McKenzies,  the  Kassons,  and  the  other  great  American 
statesmen  who,  by  means  of  this  light,  become  so  eminently 
qualified  to  direct  the  destinies  of  a  nation  of  over  50,000,000 
of  people. 

The  prices  of  things  depend  upon  the  cost  of  reproduc- 
tion and  upon  the  volume  of  products  compared  with  de- 
mand; and  this  volume  of  product  is  itself  stimulated  or 
depressed  by  the  relation  of  the  prices  obtained  to  the  cost 
of  reproduction — an  absence  of  remunerative  demand,  caus- 
ing sooner  or  later  a  decline  in  the  volume  of  production. 

EFFECT    OF    PRODUCTION    ON    PRICES. 

The  influence  of  the  volume  of  production  on  prices  was 
never  more  strikingly  illustrated  than  in  the  following  letter 
from  Mr.  J.  R.  Dodge,  Statistician  of  the  Department  of 
Agriculture,  to  the  Hon.  George  B.  Loring,  Commissioner 
of  Agriculture,  in  response  to  a  letter  of  my  own  in  Janu- 
ary last: 

U.  S.  DEPARTMENT  OF  AGRICULTURE, 

DIVISION  OF  STATISTICS, 
WASHINGTON,  January  17,  1883. 

Sir:  The  request  of  Mr.  Henry  C.  Baird  for  comparison  of 
products  and  prices  of  cereals  in  1880  and  1881,  the  former  a  year 
of  great  abundance,  the  latter  the  worst  for  production  in  recent 
times,  affords  opportunity  for  instructive  comparison  of  the  effect 
of  production  upon  price. 

It  will  be  seen  that  the  crops  which  were  comparative  failures 
in  1881,  produced  more  money  than  the  large  crops  of  1880.  This 
is  in  part  the  legitimate  result  of  increased  value  from  relative 
scarcity,  in  accordance  with  the  law  of  supply  and  demand,  and 
to  some  extent  the  effect  of  speculation,  of  forestalling  and  "cor- 
nering," for  which  the  small  stocks  furnished  temptations  and 
opportunity. 

The  rise  in  the  corn  was  about  sixty  per  cent. ,  a  greater  difference 
than  in  the  quantities.  Unlike  wheat,  more  than  a  third  of  which 
is  exported,  corn  is  little  affected  by  foreign  demand,  as  the  maxi- 
mum of  exportation  is  only  six  per  cent.  The  home  demand  there- 
fore rules  in  the  price  of  this  cereal. 

The  crop  of   oats  was  an  average  one,   the  sole  exception  in 
11 


242 


NECESSARY   FOUNDATIONS. 


cereals  of  the  year.  Why  did  the  price  advance  from  thirty -six  to 
forty-six  cents?  Simply  because  oats  can  be  used  interchangeably 
with  maize  within  certain  limits.  But  it  could  not  advance  equally 
with  that  cereal,  because  its  uses  are  not  identical. 

Wheat  comes  under  different  conditions.  It  goes  in  with  the 
product  of  Europe,  India,  Egypt,  and  the  shortage  of  the  grand 
aggregate  governs  the  price  rather  than  the  shortage  in  this 
country.  It  has  happened  that  a  very  large  crop  has  brought  a 
large  price  per  bushel,  and  a  small  crop  a  medium  price.  In  one 
case  the  surplus  of  this  country  was  all  wanted  to  supply  heavy 
deficiencies  elsewhere;  in  the  other,  a  smaller  surplus  was  in  less 
demand  abroad.  And  this  apparent  anomaly  was 'thus  strictly  and 
truly  the  natural  result  of  the  commercial  law  of  demand. 

The  following  table  gives  the  quantities  and  values,  the  prices  being 
the  average  for  the  United  States  of  the  crop  in  the  hands  of 
farmers  on  the  first  day  of  December: 

1880. 


CROPS. 

Bushels. 

Value. 

Price  per 

Bushel. 

Corn,  

1,717,434,543 

$679,714,499 

$039.6— 

Wheat,  

498,549,868 

474,201,850 

95.  i4- 

Oats                    

417  885  380 

150,243  565 

86   — 

Barley  

45,165,346 

30,090,742 

66  6+ 

Rve 

24  540  829 

18,564  560 

75  6  + 

Buckwheat  

14  617,535 

8,682,488 

59.4— 

Potatoes     

167  659,570 

81,062  214 

48  3+ 

Total,  

2,885,853,071 

$1,442,559,918 

1881. 


CROPS. 

Bushels. 

Value. 

Price  per 
Bushel. 

Corn,  

1,194,916,000 

$759,482,170 

$063.6— 

Wheat,  

383,280,090 

456,880,427 

1  19.3  + 

Oats  

416,481,000 

193,198,970 

46.4— 

Barley,  

41,161,330 

33,862,513 

82.3— 

]Rye           

20,704,950 

19,327,415 

93.3+ 

Buckwheat      .  .  . 

9  486  200 

8,205  705 

86.5+ 

Potatoes,  

109,145,494 

99,291,341 

90.9— 

Total    

2,175,175,064 

$1,570,248,541 

NECESSARY    FOUNDATIONS.  243 

A  study  of  quantities  and  prices  of  the  past  ten  years,  on  the 
basis  of  the  estimates  of  this  department,  will  afford  much  infor- 
mation concerning  the  fluctuations  of  production  and  resultant 
changes  in  values,  and  incidentally  present  very  strong  evidence 
of  the  substantial  accuracy  of  the  estimates,  showing  very  conclu- 
sively also  the  absolute  necessity  of  annual  statistics  of  production. 

Respectfully, 

J.    R.   DODGE, 
HON.  GEORGE  B.  LORING.  Statistician. 

PROFESSOR    PERRY    ANSWERED. 

To  me  it  seems  that  the  facts  and  the  reasoning  which  I 
have  presented  against  the  doctrine  of  Professor  Perry  and 
his  school  regarding  prices,  are  conclusive,  and  that  this  let- 
ter in  regard  to  the  seven  crops  named  settles  the  question 
beyond  dispute.  Not  merely  have  I  shown  stimulation  of 
domestic  production  to  be  an  accompaniment  of  protection, 
and  that  it  keeps  down  price,  in  the  face  of  a  great  increase 
in  the  power  of  consumption,  but  that  this  domestic  produc- 
tion  is  largely  destroyed  under  free  foreign  trade,  and  is 
not  compensated  for  by  foreign  supply,  when  even  with  a 
great  decline  in  the  power  of  consumption,  prices  advance 
beyond  what  they  were  under  protection.  Further,  I  have 
accounted  for  these  phenomena  by  the  statement  of  the 
quantities  and  values  of  the  great  food  crops  of  the  United 
States;  those  of  1881,  which  were  twenty -live  per  cent,  less 
in  quantity,  producing  eight  per  cent,  more  money  than  the 
larger  ones  of  1880.  So  great  is  the  influence  of  supply  on 
price,  that  had  we  never  established  the  Bessemer  rail 
industry,  which  we  would  not  have  done  without  protection, 
but  depended  wholly  on  Great  Britain  for  our  supply,  even 
though  our  power  of  consumption  had  been  far  less,  the 
price  would  have  unquestionably  been  greater;  indeed,  it  is 
quite  probable  on  the  principles  developed  by  the  facts 
shown  in  regard  to  the  quantities  and  prices  of  the  Ameri- 
can food  crops  of  1880  and  1881,  that  the  British  product 


244  NECESSARY   FOUNDATIONS. 

of  steel  rails,  had  it,  in  1881,  readied  even  1,500,000  tons, 
would  under  such  circumstances  have  produced  a  larger  aggre- 
gate sum  of  money  than  the  combined  British  and  American 
product  of  2,211,510  tons  of  that  year.  I  have  also  demon- 
strated the  narrowness  and  the  total  insufficiency  of  Pro- 
fessor Perry's  premises,  by  reason  of  his  ignoring  these 
great  and  vital  factors,  and  therefore  the  fallacious  nature 
of  his  conclusions,  which  thereby  become  utterly  unworthy 
of  a  moment's  consideration,  even  on  the  part  of  the  merest 
tyro  in  the  necessary  processes  of  reasoning. 

BREAKDOWN  OF  THE  FREE  FOREIGN  TRADE  CASE. 

Nay,  more,  the  entire  free  foreign  trade  case,  as  I  have 
shown,  breaks  down  on  the  question  of  prices — the  only 
claim  it  presents  for  our  acceptance.  A  cause  which  wholly 
ignores  the  ruin  of  productive  industries  for  the  sake  of  cheap- 
ness, and  after  the  ruin  is  accomplished  can  neither  show 
prices  so  low  as  before,  nor  an  equal  supply,  nor  an  equal 
power  of  consumption,  is  unworthy  of  the  acceptance  of  any 
rational  man,  unless  he  be  an  enemy  of  the  country,  or  the 
foreigner  who  is  receiving  this  increased  price  in  the  face  of 
decreased  demand. 

THE    BRITISH   IDEA    OF    CHEAPNESS. 

But  high  prices  are  not  necessarily  and  always  an  un- 
mixed evil.  Every  period  of  great  prosperity  in  our  history 
has  been  accompanied  by  high  prices,  especially  of  land, 
labor,  and  raw  materials.  Those  who  are  in  receipt  of  high 
remuneration  for  services  and  commodities  in  turn  make  a 
large  market  for  the  services  and  commodities  of  others. 
The  idea  of  cheapness  which  runs  throughout  British  thought, 
and  controls  British  legislation,  and  depresses,  degrades,  and 
brutalizes  the  great  body  of  the  people,  is  not  merely  wicked, 
but  stupid;  for  it  works  a  damage  to  British  industries  by 
limiting  the  volume. of  the  home  market;  the  consumption 


NECESSARY   FOUNDATIONS.  245 

of  the  products  of  which  industries  would  make  the  mass  of 
people  at  home  comfortable,  happy,  and  civilized,  thus  alike 
blessing  him  that  gives  and  him  that  takes.  Cobden  in  his 
campaigns  for  the  repeal  of  the  Corn  Laws,  held  up  to  the 
coveting  eyes  of  his  poor  auditors  the  idea  of  "the  big  loaf," 
as  a  grand  result  to  flow  from  the  free  importation  of  foreign 
corn,  thus  ignoring  the  fact  that  large  bodies  of  English,  Scotch, 
and  Irish  laborers  were  virtual  co-partners  in  British  agricul- 
ture: and  were  certain  to  be  injured  by  a  policy  which  would 
throw  vast  tracts  of  land  out  of  cultivation  in  corn  and  into 
permanent  pasture,  in  which  few  hands  are  needed.  This 
British  fetich,  cheapness,  begins  in  injustice  to  the  great 
mass  of  the  people  at  home,  and  ends  in  wars,  robberies, 
opium  dealing,  and  famines  abroad,  resulting  from  the  efforts 
to  obtain  additional  markets  and  revenues  which  should  be 
had  among  its  own  prosperous,  well-paid,  and  happy  people, 
and  which  would  add  to  the  power  as  well  as  to  the  glory  of 
the  empire ;  for  from  the  mass  of  the  people  really  comes  the 
national  force. 

THE    EATIONAL    AND    PHILOSOPHICAL    ROAD    TO    CHEAPNESS. 

But  there  is  a  real,  true,  beneficent,  and  civilizing  road  to 
cheapness.  It  is  found  in  a  diversification  of  employments, 
the  strengthening  of  the  power  of  the  people  by  means  of 
active  association,  the  intelligence  which  flows  from  this 
association,  and  leads  to  the  highest  conquests  over  the 
forces  of  nature;  and  of  their  utilization  in  propelling 
machinery  and  producing  mechanical  and  chemical  changes 
in  the  forms  of  matter.  Thus,  and  thus  only,  do  raw  mate- 
rials,  including  land  and  labor,  tend  to  rise,  because  they 
thereby  find  new  utilization;  and  finished  commodities  to 
fall,  because  of  the  readiness  with  which  they  are  converted 
into  finished  forms  by  the  aid  of  chemical  reactions,  and  by 
machinery  propelled  by  water,  heat,  steam,  gas,  and  electric- 
ity. Thus,  and  thus  only,  does  man  become  free.  The 


246  NECESSARY   FOUNDATIONS. 

power  obtained  in  the  harnessing  of  natural  forces  into  the 
uses  of  man  will  be  made  clearly  apparent  when  it  is  con- 
sidered that  three  tons  of  coal  represent  the  labor  power  of 
a  man  for  his  lifetime.  But  when  applied  to  improved 
machinery  of  great  velocity,  working  with  but  little  friction, 
this  power  is  at  times,  by  actual  computation,  multiplied  as 
much  as  five-fold;  in  other  words,  three  tons  of  coal  then 
representing  the  labor  power  of  five  men  for  their  entire 
lives.  In  the  city  of  Philadelphia,  for  instance,  there  is  a 
cotton  mill,  and  not  one  of  enormous  size,  which  in  1877 
manufactured  in  every  day  of  ten  hours  40,000  miles  of  cot- 
ton yarn,  obtaining  from  eight  tons  of  coal  dust  the  necessary 
power.  Supposing  it  possible  for  such  a  quality  of  yarn  to 
be  made  by  hand,  it  would  require  the  labor  of  85,000 
women  working  for  the  same  number  of  hours.  In  1870 
but  137,876  men,  women,  and  children  were  employed  in 
the  productive  industries  of  that  city;  the  products  of  which 
were  of  the  value  of  $334,852,458.  Thus  did  this  one  cot- 
ton mill  represent  nearly  two -thirds  of  the  mere  physical 
power  of  those  persons  who  produced  this  great  body  of 
commoditieSc  By  actual  computation  from  the  work  done 
by  the  mill  in  the  month  of  February,  1877,  and  the  cost  of 
that  work,  for  human  labor  to  have  competed  with  it  unaided 
by  machinery,  it  would  have  been  necessary  for  that  labor  to 
have  worked  for  46^-100  of  one  cent  per  day  wages. 

With  such  increase  of  force  and  decline  of  cost  of  conver- 
sion in  human  labor,  we  may  calmly  leave  prices  to  regulate 
themselves  by  means  of  domestic  competition,  and  the  new 
improvements  in  machinery  and  the  new  knowledge  of 
chemical  reactions  which  are  always  taking  place  in  a  society 
of  high  vitality.  In  such  a  society  the  standard  arguments 
of  the  average  political  economist  of  the  free  foreign  trade 
persuasion  about  prices  are  only  worthy  of  the  proprietor  of 
a  shop  where  candy  is  sold  by  the  stick  and  gingerbread  by 
the  single  cake.  The  power  which  Great  Britain  gets  from 


NECESSARY    FOUNDATIONS.  247 

coal  and  machinery  is  generally  estimated  as  equal  to  that  of 
600,000,000  men,  but  from  a  calculation  which  I  myself 
made  a  few  years  since,  based  upon  authentic  data  as  to  the 
cotton  spindles  in  that  empire,  I  am  well  satisfied  that  it  is 
at  least  equal  to  that  of  2,500,000,000  of  men. 

THE    ARTIFICIAL    NATURE    OF   CIVILIZED    SOCIETY. 

But  the  free  foreign  trader  objects  to  the  imposition  of 
duties  on  foreign  merchandise  because  it  introduces  an  arti- 
ficial element  into  society,  and  interferes  with  his  inalienable 
right  to  buy  where  he  can  buy  cheapest,  and  sell  where  he 
can  sell  dearest.  The  fact  is,  this  is  prima  facie  evidence  in 
its  favor,  because  this  man  forms  a  part  of  an  artificial 
society — one  in  which  the  very  clothes,  abodes,  manners, 
customs,  and  modes  of  living  and  being  are  artificial.  Indeed, 
if  he  is  a  man  of  any  culture  his  own  countenance  is  artificial, 
being  made  up  by  his  surroundings  and  the  knowledge 
which  they  have  given  him.  The  more  cultivated  and  civil- 
ized this  society  the  more  fully  have  the  members  of  it 
departed  from  nature.  The  natural  man  is  found  in  Africa, 
in  Patagonia,  and  in  a  measure  among  our  Indians.  The 
free  foreign  trader  will  find  his  natural  rights  among  such 
men  as  these,  and  among  bears,  wolves,  and  catamounts,  if 
he  has  the  strength  and  cunning  necessary  to  maintain  them. 
There  he  will  find  no  custom  houses,  no  police,  no  boards  of 
health,  no  municipal  government  which  will  oblige  him  to 
lay  down  pavements  for  other  men  and  their  horses  and 
vehicles  to  pass  over,  nor  sewers,  nor  gas  pipes  for  the  use 
of  others,  nor  will  he  be  obliged  to  pay  for  the  schooling  of 
other  people's  children,  or  be  subject  to  the  other  restraints 
of  civilized  society;  but  he  will  probably,  after  a  few  hours, 
days,  or  weeks  of  this  experience,  conclude  that  the  restraints 
and  privileges  of  civilization  are  far  preferable  to  the  discom- 
forts and  dangers  which  accompany  the  untrammelled  exer- 
cise of  his  natural  rights  in  the  midst  of  nature's  wild 


248  NECESSARY  FOUNDATIONS. 

domain;  and  elect  to  become  a  law-abiding  member  of  a 
society  in  which  the  prosperity  and  happiness  of  all  are  the 
guiding  star. 

THE    RIGHTS    OF    AMERICAN    PRODUCERS. 

And  when  our  free  foreign  trader  comes  to  look  more 
deeply  into  the  nature  of  this  society,  he  may  even  be  dis- 
posed to  abandon  his  views  in  favor  of  free  foreign  trade  on 
the  ground  of  mere  justice  to  our  producers.  As  it  is  off 
of,  or  from  American  production,  that  the  whole  people, 
producers  and  non-producers,  live,  so  it  must  be  on  the 
shoulders  of  American  producers  that  all  national,  State, 
and  local  taxation  finally  rests,  unless  we  can  transfer  some 
of  this  taxation  to  foreigners  who  seek  our  markets,  which 
are  wholly  the  fruit  of  American  production.  It  would 
therefore  be  altogether  subversive  of  the  rights  of  these 
American  producers  to  admit  the  products  of  foreigners, 
except  upon  the  condition  that  they  pay  a  rate  of  taxation 
equal  to  that  paid  by  American  producers — these  latter  hav- 
ing rights  under  their  own  government,  which  they  entirely 
support,  at  least  equal  to  those  of  foreigners.  The  only 
rational  and  proper  basis  for  free  trade,  is  that  wholly 
between  our  own  people,  and  not  between  some  of  our  own 
people  and  foreigners;  and  until  every  possible  means  are 
taken  to  cast  of!  the  existing  shackles  which  hamper  the  trade 
between  parties  wholly  American,  that  between  Americans 
and  foreigners  must  be  asked  to  stand  aside  and  wait  its 
day  of  realization  in  the  future,  and  in  a  new  Utopia. 

THE     ARTIFICIAL     DEVELOPMENT     OF     NATIONS     AND     THEIR    IN- 
DUSTRIES. 

In  dealing  with  this  society  of  ours,  which  we  call  the 
nation,  we  cannot  too  clearly,  distinctly,  and  persistently 
bear  in  mind  that  it  exists,  one  among  many  nations,  each 
of  which  has  more  or  less  developed  an  artificial  existence, 


NECESSARY    FOUNDATIONS.  249 

and  not  a  s'ngle  one  of  which  has  industries  all  of  which 
bear  perfect  and  harmonious  relations  to  each  other;  that 
some  one  or  more  of  these  countries  has  one  or  many  in- 
dustries which  we  ourselves  have,  and  which  are  developed 
to  a  greater  extent  than  our  own.  Once  more,  we  must 
remember  that  association  with  his  fellow-men  is  the  first, 
the  greatest,  the  paramount  need  of  man;  that  the  more 
complete  the  diversification  of  employments,  the  greater  this 
power  of  association,  the  greater  the  motion  in  society,  the 
less  the  loss  of  labor-power,  the  greater  the  ability  to  subject 
to  the  human  will  and  use  the  forces  of  nature;  the  less  the 
expenditure  of  human  labor  in  converting  raw  materials 
into  finished  commodities,  the  greater  the  power  to  command 
an  ample  supply  of  money,  the  instrument  of  association, 
and  the  lower  the  rate  of  interest — the  precious  metals 
traveling  from  those  places  where  employments  are  not 
diversified  and  where  the  rate  of  interest  is  high,  to  where 
they  are  diversified,  and  where  the  rate  of  interest  is  low. 

The  artificial  and  inharmonious  development  of  the  in- 
dustries of  other  nations  calls,  in  turn,  for  artificial  provis- 
ions against  any  movements  of  these  industries  in  the 
direction  of  the  destruction  of  the  more  or  less  happy 
balance  of  industries  existing  or  trying  to  exist  among  our- 
selves— this  balance  being  a  measure  of  the  power  which  we 
ourselves  have  actually  developed.  These  provisions  are 
especially  essential  the  world  over  against  the  competing 
industries  of  Great  Britain;  the  well -recognized  and  even 
avowed  selfish  and  wicked  policy  of  which  is  industrial  war- 
fare, with  a  view  to  the  centralization  of  wealth  in  the 
would-be  work-shop  of  the  world. 

These  provisions  against  the  destruction  of  the  harmonious 
balance  of  industries  are  known  under  the  name  of 

PROTECTION, 

a  policy  which  not  merely  rest  upon  the  foundations  of  justice, 
but  which  is  vindicated  by  all  history;  whether  that  history 


250  NECESSARY    FOUNDATIONS. 

be  of  England,  France,  Belgium,  Kussia,  or  the  German 
Empire,  the  power  of  all  of  which  has  been  built  up  by  this 
policy,  or  of  Ireland,  Turkey,  Egypt,  Portugal,  India,  Japan, 
or  Jamaica,  the  power  of  which  has  been  destroyed  by  the 
absence  of  it.  It  is  vindicated  at  every  step  in  our  own 
history,  from  the  settlement  of  the  colonies  to  the  present 
hour;  each  period  of  free  foreign  trade  having  caused  an 
impoverishment  of  the  people,  the  colonies,  the  States,  or  the 
nation,  and  each  period  of  protection,  after  protection  be- 
came possible  by  independence,  having  caused  the  rescue  of 
both  people  and  governments  from  wretchedness,  bankruptcy, 
and  despair. 


CHAPTER  XV. 

PROTECTION  AND    FREE  TRADE. 

BY  RIGHT  HON.  HENRY  FAUCETT,  M.P.,  D.C.L.,  F.R.S. 
Professor  of  Political  Economy  in  the  University  of  Cambridge. 


THE   ARGUMENTS    OF    PROTECTIONISTS. 

AFTER  a  careful  consideration  of  the  arguments  which 
are  adduced  in  support  of  protection  by  those  who 
may  be  regarded  as  its  leading  advocates  in  America,  in  the 
Colonies,  and  in  various  Continental  countries,  I  think  it  will 
be  admitted  that  a  full  and  complete  statement  of  their  case 
will  be  given  by  arranging  the  arguments  which  are  now 
advanced  in  support  of  protection  under  the  following  thir- 
teen heads.  It  will  be  observed  that  some  of  these  argu- 
ments are  of  a  contradictory  character.  This  circumstance 
is  however  accounted  for  by  the  fact  that  protection  is 
regarded  from  different  points  of  view,  and  supported  for 
different  reasons,  in  different  countries,  and  I  have  been 
anxious  to  omit  no  argument  to  which  importance  is  attri- 
buted by  those  who  defend  protection  in  the  various  coun- 
tries in  which  it  is  maintained: 

1.  Protection  is  desirable,  and  especially  so  in  a  young 
country,  because  it  secures  diversity  of  industry.  A  country 
such  as  America  or  Australia  possessing  an  almost  bound- 
less extent  of  fertile  land,  has  exceptional  facilities  for  the 
production  of  raw  material.  If  therefore  manufactures  are 
not  fostered  by  protection,  labor  and  capital  will  be  chiefly 

(251) 


252          PROTECTION  AND  FREE  TRADE. 

devoted  to  agriculture,   and   the  growth  of  towns  will  be 
discouraged. 

\.  Protection,  by  encouraging  various  branches  of  home 
industry,  makes  a  community  much  less  dependent  upon 
foreign  countries. 

3.  The  American  protectionists  assume  that  in  foreign 
trade  the  cost  of  carriage  is  paid  by  the  exporting  country. 
Eaw  produce  being  more  bulky  than  manufactured  good's 
of  the  same  value,  is  more  costly  to  export.     They  therefore 
argue  that  America  would  be  placed  at  a  disadvantage  com- 
pared with  England  if  she  imported  all  the  manufactured 
goods  she  wanted  in  exchange  for  raw  produce. 

4.  It  is   said  that   the  home  jnanufacturer  has  to   pay 
various  taxes  which  are  not  levied  from  his  foreign  com- 
petitor, and  therefore  if  he  does   not   receive    some   com- 
pensation in  the  form  of  protection,  he  must  necessarily  be 
placed  at  a  disadvantage. 

5.  Protection  is  advantageous  to  a  country  because  it 
encourages  various  branches  of  home  trade,  and  discourages 
to  the  same  extent  the  trade  of  foreign  countries. 

6.  A  protective  import  duty,  it  is  asserted,  is  ultimately 
almost  entirely  paid  by  the  foreign  producer.     Consequently 
protection    secures   the    double    advantage   of    taxing   the 
foreigner  and  of  encouraging  home  industry. 

7.  As   profits   and  wages   are   not   higher  in   protected 
industries    than    in   those    which    are   not    protected,    the 
objection  ordinarily  urged  against  protection — that  it  benefits 
a  special  trade  at  the  expense  of   the  general  consumer — 
cannot  be  fairly  maintained. 

8.  Protection  is  economically  advantageous,  because  if  a 
country  obtains  its  produce  at  home  instead  of  importing  it, 
the  labor  employed  in  transporting  produce  from  a  distance 
is  saved,  and  this  labor  is  assumed  to  be  unproductive. 

9.  Protection  is  represented  as  conferring  great  benefit 
upon  the  working  classes  in  America,   because  the  wages 


PROTECTION  AND  FREE  TRADE.         258 

which  are  paid  in  certain  industries  which  enjoy  protection 
in  America  are  higher  than  the  wages  in  the  same  industries 
in  free-trade  England. 

10.  Protection  would  be  unjust  if  only  one  industry  were 
protected,  because  the  general  public  would  obtain  no  com- 
pensation for  the  increased  price  they  would  have  to  pay  for 
the   product   of    this   particular  industry.     They    however 
obtain  this  compensation,  if  protection  is  so  extended  that 
the    entire    industry   of    the    country    participates    in    its 
advantages. 

11.  Protection  has  been  defended  on  the  ground  that 
wages  being  higher  in  America  and  in  the  Colonies  than  in 
England,  the  American  and  the  Colonial  traders  require  pro- 
tection in  order  to  place  them  in  a  position  of  equality  with 
their  English  competitors. 

12.  Protection,  having  been  once  established,  cannot  be 
abolished    without   causing    great   loss   to    employers   and 
employed  in  those  trades  which  have  been  protected. 

13.  Protection  can  be  advantageously  introduced  into  a 
young   country   as   a   temporary   expedient,    since    various 
industries  which  will  ultimately  prosper  without  protection 
require  its  aid  in  the  early  stages  of  their  existence. 

I  will  now  proceed  to  consider  these  arguments  in  the 
order  in  which  they  have  been  stated. 

1.  It  will  be  observed  that  in  the  foregoing  enumeration 
of  the  reasons  which  are  advanced  in  support  of  protection, 
the  first  position  has  been  given  to  what  is  known  as  the 
"  diversity  of  industry  "  argument,  because  there  is  no  single 
point  on  which  so  much  stress  is  laid  by  American  and 
Colonial  protectionists. 

It  is  contended  that  a  country  which  has  almost  inex- 
haustible supplies  of  fertile  land,  considerable  portions  of 
which  are  still  unoccupied,  possesses  such  exceptional 
advantages  for  agriculture  that  its  labor  and  capital  will  be 
chiefly  concentrated  on  the  production  of  raw  produce;  it  is 


254          PROTECTION  AND  FREE  TRADE. 

accordingly  maintained  that  although  it  might  be  cheaper, 
for  instance,  for  America  to  purchase  from  foreign  countries 
various  articles  of  manufacture  with  this  raw  produce  instead 
of  making  the  articles  for  herself,  yet  the  gain  thus  secured 
would  be  dearly  bought  because  of  the  harm  which  would 
be  done  to  America  if  there  were  no  variety  in  the  occupa- 
tions of  her  people.  If  scarcely  any  industry  were  carried 
on  except  agriculture,  many  who  were  not  suited  for  outdoor 
work  but  who  could  acquire  a  skill  which  would  enable 
them  to  excel  in  some  handicraft,  might  find  it  impossible  to 
obtain  any  employment  for  which  they  were  qualified;  there 
would  consequently  be  a  great  waste  of  industrial  power.  It 
is  also  alleged  that  the  social  development  and  progress  of 
the  country  would  be  most  seriously  impeded  if  the  greater 
part  of  its  population  devoted  itself  to  field  work,  and  lived 
in  scattered  settlements-  whereas  if  manufactures  were 
established  people  would  become  more  concentrated,  the 
growth  of  towns  would  be  ensured,  and  in  addition  to  the 
foreign  demand,  there  wculd  arise  a  large  home  demand 
for  agricultural  produce. 

It  is  evident  that  the  whole  of  this  reasoning  rests  on  the 
hypothesis  that  it  is  impossible  for  manufacturing  industry 
to  exist  in  a  young  country  unless  it  receives  the  fostering 
aid  of  protection.  It  can,  I  believe,  be  shown  that  this 
hypothesis  is  not  warranted  either  by  theory  or  by  experi- 
ence. "When  a  country  is  first  settled  and  is  consequently 
very  sparsely  peopled,  it  possesses  no  sufficient  supply  of 
labor  for  the  establishment  of  manufactures  on  an  extensive 
scale.  Gradually,  however,  as  population  increases,  there 
will  arise  various  branches  of  domestic  industry  which  will 
supplement  and  assist  in  various  ways  the  labor  of  those 
who  are  engaged  in  agriculture.  However  purely  agricul- 
tural the  industry  of  a  country  may  be,  there  must  always 
be  a  great  deal  of  work  to  be  done  which  will  provide  many 
different  kinds  of  employment  besides  the  mere  tilling  of 


PROTECTION  AND  FREE  TRADE.          255 

land.  Houses  and  other  buildings  have  to  be  erected,  roads 
have  to  be  made,  agricultural  implements  and  machinery 
have  to  be  repaired,  and  the  cost  of  carriage  will  make 
many  articles,  especially  those  of  a  bulky  kind,  so  expensive 
to  import  that,  although  labor  may  be  dearer  in  a  new 
country,  it  will  be  found  cheaper  to  make  the  articles  at 
home.  The  various  trades  and  handicrafts  which  are  thus 
called  into  existence  will  create  an  increasing  demand  for 
skilled  labor,  and  in  this  way  that  industrial  uniformity 
about  which  the  protectionists  express  so  much  alarm  will 
be  avoided.  It  has  been  already  explained  that  the  home 
trader,  even  where  no  protective  duties  are  imposed,  enjoys 
a  natural  protection  so  far  as  the  home  market  is  concerned, 
because  he  can  bring  his  produce  to  this  market  at  a  much 
less  cost  than  can  his  foreign  competitors. 

Although  the  desirability  of  securing  diversity  of  industries 
is  constantly  put  forward  as  one  of  the  chief  reasons  why 
protection  is  supported,  yet  the  tariff  which  is  at  the  present 
time  maintained  in  the  United  States  affords  a  conclusive 
proof  that  motives  of  a  very  different  kind  must  exercise  a 
powerful  influence  on  those  who  favor  protection.  It  will 
be  found  by  referring  to  this  tariff,  that  protective  duties  are 
not  solely  imposed  on  manufactures.  No  article  for  instance 
is  subjected  to  a  heavier  import  duty  than  timber.  It  can- 
not be  supposed  that  by  excluding  Canadian  and  other  timber 
from  the  American  market,  and  thus  making  timber  dearer 
than  it  otherwise  would  be,  the  growth  of  towns  will  be 
encouraged,  and  that  a  greater  amount  of  suitable  employ- 
ment will  be  forthcoming  for  those  who  possess  the  skill 
required  in  various  handicrafts  and  who  are  not  fitted  for 
rough  outdoor  work.  Such  a  duty  exercises  an  influence  in 
exactly  the  opposite  direction:  for  when  the  home  timber 
trade  is  thus  artificially  encouraged  by  protection,  a  greater 
number  of  the  population  are  scattered  far  and  wide  over 
the  country,  employed  in  cutting  timber  and  bringing  it  to 


256          PROTECTION  AND  FREE  TRADE. 

market.  The  most  serious  objection  to  be  urged  against 
the  policy  of  imposing  duties  in  order  to  force  into  an 
unnatural  existence  certain  branches  of  industry  arises  from 
the  fact,  that  when  the  aid  of  such  an  agency  has  once 
been  resorted  to,  its  future  operation  cannot  be  controlled. 
Although  it  may  have  been  intended  by  those  who  first 
introduced  protection  into  the  United  States,  to  do  nothing 
more  than  give  a  temporary  assistance  to  certain  manufac- 
turers in  order  to  enable  them  to  struggle  against  the  diffi- 
culties which  often  beset  a  new  industry,  yet  the  aid  which 
was  thus  given,  far  from  being  temporary,  has  been  continued 
for  nearly  a  century  ,  and  instead  of  a  few  products  being 
protected  against  foreign  competition  there  is  scarcely  a 
single  article  that  can  be  produced  in  the  United  States 
which  is  not  now  subjected  on  importation  to  a  high  protect- 
ive duty.  This  extension  of  protection  is  not  due  to  any 
accidental  circumstances.  Fire  is  not  more  certain  to  spread 
among  inflammable  material  than  is  protection  when  once 
sanctioned  to  embrace  a  constantly  increasing  number  of 
industries  within  its  influence.  Each  new  protective  duty 
which  is  imposed  inevitably  creates  a  demand  for  more 
protection  in  other  industries.  The  ironmasters,  for  example, 
of  the  United  States  may  not  improbably  demand  a  greater 
amount  of  protection,  for  high  as  are  the  protective  duties 
now  imposed  on  imported  iron,  amounting  in  some  instances 
to  ICO  per  cent.,  foreign  iron  still  finds  its  way  in  consid- 
erable quantities  to  the  American  market.  In  1874  no  less 
than  £3,000,000  worth  of  iron  was  imported.  Although 
this  importation  subsequently  declined,  it  is  now  (1881) 
again  rapidly  increasing.  This  influx  of  foreign  iron,  it 
may  be  urged,  constantly  forces  down  prices,  deprives  the 
ironmasters  and  those  whom  they  employ  of  a  part  of  the 
prosperity  to  which  they  are  fairly  entitled  when  trade  is 
active,  and  intensifies  the  depression  of  adverse  times.  If  a 
demand  for  more  protection  were  conceded,  the  supply  of 


PROTECTION   AND    FREE   TRADE.  257 

foreign  iron  in  the  American  market  might  be-  greatly  cur- 
tailed and  the  price  of  American  iron  would  be  considerably 
increased.  But  the  moment  this  advance  in  price  occurred 
a  signal  would  be  given  to  demand  more  protection  in  a 
great  number  of  other  industries.  Every  article  which  was 
made  of  iron  would  become  dearer,  and  those  who  had  to 
purchase  these  articles  would  find  a  new  burden  imposed 
upon  them.  The  American  cotton  and  woolen  manufac- 
turers might  fairly  say,  "  It  has  been  scarcely  possible  for 
us  to  hold  our  own  against  our  foreign  competitors,  but  now 
that  in  order  to  benefit  the  iron  trade  the  price  of  iron  has 
been  increased,  as  we  have  to  pay  more  for  our  machinery  ; 
this  places  us  at  a  disadvantage  compared  with  English, 
French,  and  other  manufacturers  ;  we  have  consequently  a 
right  to  demand  an  increase  of  protection,  in  order  to  com- 
pensate us  for  the  advantage  which  would  otherwise  be  given 
to  our  foreign  rivals." 

In  discussing  the  various  arguments  which  are  adduced  in 
support  of  protection,  it  will  not  be  sufficient  to  consider  the 
subject  simply  in  its  economic  aspects.  Thus,  as  already 
stated,  the  social  and  other  benefits  which  are  conferred  upon 
a  country  by  its  possessing  a  diversity  of  industries  are  sup- 
posed to  provide  an  ample  compensation  for  any  economic 
loss  which  may  be  caused  by  protection.  As  complaints  are 
constantly  made  by  protectionists  that  their  opponents  per- 
sistently ignore  all  the  results  of  protection  which  are  not 
economic,  I  shall  be  careful  to  consider  these  results,  and  I 
shall  be  the  more  anxious  to  do  so  because  without  such 
consideration  the  real  magnitude  of  the  mischief  which  is 
done  by  protection  cannot  be  adequately  understood.  There 
is  nothing  more  calculated  to  exercise  a  deteriorating  influ- 
ence upon  a  country  than  to  encourage  its  industrial  classes 
to  be  perpetually  looking  to  the  State  for  assistance.  When 
a  nation  becomes  thoroughly  imbued  with  the  doctrines  of 
protection,  it  seems  to  display  towards  competition  the  same 


258          PROTECTION  AND  FREE  TRADE. 

sort  of  helpless  terror  as  is  shown  by  a  timid  child  terrified 
by  the  fancied  presence  of  a  ghostly  apparition.  The  statis- 
tics of  exports  and  imports  are  eagerly  scanned,  and  when- 
ever the  import  of  any  particular  article  is  discovered  to  be 
on  the  increase  a  piteous  cry  is  raised  for  more  legislative 
protection  against  this  growing  foreign  qompetition.  Instead 
of  trying  to  ascertain  whether  if  the  foreign  producer  is 
gaining  an  advantage,  it  is  not  being  secured  through  greater 
industrial  enterprise,  recourse  is  immediately  had  to  all  the 
political  artifices  by  which  any  particular  trade  interest  can 
bring  its  influence  to  bear  on  the  government.  The  efforts 
which  are  thus  being  constantly  made  by  those  engaged  in 
different  industries  to  secure  legislative  aid,  have  probably 
done  more  than  anything  else  to  encourage  that  "  lobbying  " 
and  ' '  wire-pulling  "  which  form  such  prominent  features  in 
the  politics  of  the  United  States.  No  inconsiderable  portion 
of  the  energy  of  her  public  men,  which  should  be  devoted 
to  further  objects  of  national  importance,  is  employed  in 
gaining  for  some  particular  trade  what  is  supposed  to  be  the 
privilege  of  a  higher  protective  duty.  This  opinion  is  forci- 
bly confirmed  by  an  able  American  economist,  Professor 
"W.  (1.  Sumner,  who  says : 

"  This  continual  law  making  about  industry  has  been 
prolific  of  industrial  and  political  mischief.  It  has  tainted 
our  political  life  with  log-rolling,  presidential  wire-pulling, 
lobbying,  and  custom-house  politics.  It  has  been  inter- 
twined with  currency  errors  all  the  way  along.  It  has 
created  privileged  classes  in  the  free  American  community, 
who  were  saved  from  the  risks  and  dangers  of  business  to 
which  the  rest  of  us  are  liable.  It  has  controlled  the  elec- 
tion of  congressmen,  and  put  inferior  men  in  office,  whose 
inferiority  has  reacted  upon  the  nation  in  worse  and  worse 
legislation.  Just  now  we  are  undergoing  a  spasm  of  indig- 
nation at  official  corruption,  and  we  want  to  reform  the  civil 
service,  but  there  is  only  one  way  to  accomplish  that,  and 


PROTECTION  AND  FREE  TRADE.          259 

that  is  to  cut  up  the  whole  system  which  has  made  the  civil 
service  what  it  is."  * 

It  would  therefore  seem  to  be  conclusively  established  that 
protection  may  produce  social  and  political  consequences 
even  far  more  mischievous  than  the  economic  loss  it  causes 
to  a  country. 

In  referring  to  the  social  and  political  influence  wtich  is 
exercised  by  protection,  I  think  it  may  be  well  to  direct 
attention  to  the  encouragement  it  may  give  to  one  of  the 
most  serious  phases  of  modern  socialism.  It  may  be 
observed  that  there  is  a  fundamental  difference  between  tho 
schemes  of  the  earlier  socialists  and  the  socialism  which  in 
Germany  and  many  other  countries  is  now  received  with 
most  favor.  The  chief  aim  of  the  earlier  socialist  was  by 
the  formation  of  voluntary  associations  to  effect  certain 
social  reforms,  and  they  proposed  to  attain  their  object,  not 
by  State  assistance,  but  by  conforming  to  certain  rules, 
which  they  voluntarily  imposed  upon  themselves,  as  to  theii 
mode  of  life,  and  as  to  the  distribution  of  their  property. 
The  socialists  of  the  present  day,  however,  chiefly  hope  to 
effect  their  object  by  State  aid.  Whenever  a  programme  of 
socialism  is  now  put  forward,  it  will  be  invariably  found  that 
a  demand  is  urged  for  an  almost  indefinite  extension  of 
State  intervention.  The  State  is  to  supply  capital  to  labor. 
Co-operative  associations  are  to  be  founded  by  State  loans, 
the  land  is  to  be  purchased  by  the  State  and  relet  to  the 
cultivators,  and  the  State  is  to  regulate  the  number  of  hours 
which  adults  should  be  permitted  to  work.  This  form  of 
•socialism  has  assumed  its  most  marked  development  in  .such 
a  protectionist  country  as  Germany,  and  I  think  it  cannot  be 
doubted  that  protection  must  exert  an  inevitable  tendency 
to  foster  these  socialistic  demands  for  State  assistance.  If  a 
people  are  accustomed,  as  they  must  be  under  a  system  of 


*"  Lectures  on  the  History  of  Protection  in  the  United  States/'  by  Professor 
\V.  G.  Sumner. 


200  PROTECTION   AND    FREE    TRADE. 

protection,  to  believe  that  the  prosperity  of  each  separate 
branch  of  industry  depends  not  so  much  upon  individual 
energy  and  skill  as  upon  the  amount  of  protection  it  can 
obtain  from  the  government,  there  can  be  no  surer  way  of 
encouraging  the  growth  of  a  belief  not  only  that  industrial 
prosperity  but  that  the  general  social  well-being  of  the 
country  is  chiefly  to  be  secured  not  by  individual  effort  but 
by  State  help. 

2.  The  second  argument  in  favor  of  protection  is,  that  by 
encouraging  various  branches  of  home  industry,  a  community 
is  made  much  less  dependent  upon  foreign  countries. 

This  argument  may  be  at  once  admitted  to  constitute  the 
only  logical  basis  on  which  a  protective  system  can  be  sup- 
ported ;  for  if  it  could  be  assumed  that  the  normal  condition 
of  a  country  was  to  be  perpetually  at  war  with  its  neighbors, 
it  would  become  of  the  first  importance  to  make  it,  as  far  as 
possible,  industrially  independent  of  them.  Under  such 
circumstances  it  might  be  expedient,  at  whatever  cost,  to 
impose  protective  duties  with  the  view  of  establishing  and 
maintaining  various  branches  of  home  industry.  It  is  on 
grounds  such  as  these  that  protection  is  probably  most  fre- 
quently defended.  Thus  the  French  consider  that  they  are 
amply  justified  in  imposing  a  protective  duty  on  salt,  because 
without  such  a  duty  no  salt  would  be  produced  in  France, 
and  all  the  salt  which  the  French  people  consume  would 
consequently  have  to  be  imported.  It  is  said  that  in  time 
of  war,  the  coast  of  France  and  her  frontiers  might  be  so 
effectually  blockaded  that  no  salt  could  be  imported;  time 
would  be  required  to  create  the  necessary  appliances  for  its 
manufacture;  her  people  might  thus  be  deprived  of  the 
supplies  they  required  of  a  first  necessary  of  life,  and  they 
would  be  placed  at  a  great  disadvantage  in  the  war  in  which 
they  might  be  engaged.  It  is  therefore  maintained  that 
rather  than  incur  this  risk  it  is  better  for  the  French  people 
to  pay  an  increased  price  for  the  salt  which  they  consume. 


PROTECTION  AND  FREE  TRADE.          261 

Let  us,  however,  endeavor  to  estimate  the  exact  degree  of 
risk  which  France  would  incur  of  being  deprived  of  its 
supplies  of  salt  if  it  were  freely  imported,  and  then  we  shall 
be  better  able  to  judge  whether  the  price  which  is  now  paid 
to  avert  this  supposed  danger  can  be  regarded  as  a  wise  and 
judicious  expenditure. 

It  is  scarcely  possible  to  imagine  any  conjuncture  of  cir- 
cumstances which  would  cause  France  to  be  engaged  in 
such  an  universal  war  that  she  had  not  a  single  ally  or  a 
single  neutral  power  on  her  frontier.  The  first  Napoleon 
was  at  one  time  carrying  on  war  with  the  greater  part  of 
Europe,  and  yet  there  was  never  a  moment  even  in  his 
unparalleled  career  of  military  aggression,  when  all  the 
coasts  and  all  the  frontiers  of  France  were  so  completely 
blockaded  that  no  foreign  product  could  find  its  way  to  her 
markets.  There  would,  therefore,  seem  to  be  every  reason 
to  conclude  that  the  danger  which  protection  is  supposed  to 
avert  is  a  purely  imaginary  one.  But  even  if  we  admit 
the  bare  possibility  of  its  occurrence,  the  question  is  at  once 
suggested,  cannot  some  other  means  be  devised  of  guard- 
ing against  it,  which  will  prove  less  burdensome  to  a  country, 
than  compelling  its  entire  people,  whether  rich  or  poor,  to 
pay  an  unnecessarily  high  price  for  articles  of  the  first 
necessity?  The  consumption  of  salt  in  France  for  domestic 
purposes  may  be  estimated  at  about  360,000,000  Ibs.  Salt 
is  subjected  to  an  excise  duty  in  France  of  45.  per 
cwt. ;  but  the  duty  which  is  imposed  on  foreign  salt  when 
imported  being  thirty-three  per  cent,  higher  than  the  excise 
duty,  French  salt  is  by  this  duty  S3  effectually  protected, 
that  scarcely  any  salt  is  imported.  It  is  affirmed  on  the 
authority  of  those  who  have  an  intimate  practical  knowledge 
of  the  salt  trade  that  this  restriction  of  foreign  importation 
increases  the  price  of  salt  in  France  by  a  halfpenny  a  pound; 
consequently,  the  protective  duty  imposes  a  tax  on  the  French 
consumers  of  salt  of  at  least  £750,000  a  year,  beyond  the 


262         PROTECTION  AND  FREE  TRADE. 

amount  which  the  duty  on  salt  yields  to  the  French  revenue. 
When  it  is  remembered  that  salt  is  used  for  many  purposes 
in  manufacturing  and  agricultural  industry,  it  is  a  moderate 
estimate  to  assume  that  the  protective  duty  on  salt  annually 
imposes  a  fine  of  £1,000,000  on  the  French  people,  beyond 
the  amount  which  is  directly  levied  from  them  by  the  salt 
tas.  The  £1,000,000  a  year  is  taken  from  them,  in  order 
to  give  encouragement  to  the  home  manufacture  of  salt, 
and  in  order  to  make  France  independent  of  foreign  sup- 
plies.  It  has  also  to  be  borne  in  mind  that  the  protective 
duty,  although  it  imposes  this  heavy  fine  on  the  French 
people,  far  from  adding  anything  to  the  revenue,  actually 
diminishes  it  to  a  considerable  extent.  If  no  protective 
duty  were  imposed  on  foreign  salt,  and  if  the  excise  and 
import  duty  were  exactly  the  same,  the  price  of  salt  would 
be  materially  reduced  in  France;  the  consumption  of  salt 
would  consequently  be  increased,  and  the  revenue  would  be 
proportionately  augmented,  if  the  import  duty  were  reduced 
to  the  same  rate  as  the  present  excise.  Not  only,  therefore, 
does  protection  injure  the  revenue,  but  by  unnecessarily 
increasing  the  price  of  salt  it  imposes  a  tax  of  at  least 
£1,000,000  a  year  on  the  French  people.  Not  one  shilling 
of  this  large  amount  can  be  appropriated  by  the  govern- 
ment to  the  general  purposes  of  the  State,  for  it  has  to  be 
entirely  devoted  to  compensate  the  French  manufacturers 
of  salt  for  the  disadvantages  under  which  they  carry  on 
their  industry,  compared  with  the  favorable  conditions 
under  which  salt  can  be  produced  in  England  and  in  other 
countries. 

It  is  not  necessary  to  express  any  opinion  here  with  regard 
to  the  expediency  of  taxing  such  a  necessary  of  life  as  salt. 
I  am  simply  attempting  to  trace  the  effect  of  preventing  the 
importation  of  salt  by  a  protective  duty ;  and  however  high 
the  duty  imposed  on  salt  might  be,  it  would  cease  to  be  protec- 
tive if  home-made  and  foreign  salt  were  taxed  at  the  same  rate. 


PROTECTION  AND  FREE  TRADE.          263 

From  the  figures  just  given,  an  idea  can  be  formed  of  the 
price  which  is  annually  paid  by  the  French  people,  with  the 
object  of  guarding  themselves  against  the  remote  contin- 
gency of  a  war  so  universal  that  every  avenue  by  which 
foreign  produce  could  find  its  way  into  France  would  be 
completely  closed.  As  such  an  event  has  never  yet  hap- 
pened, the  greatest  alarmist  can  scarcely  suppose  that  it  will 
occur  more  than  once  in  a  century.  It  would  thus  appear 
that  in  order  to  provide  against  it  a  contribution  amounting 
in  the  aggregate  to  £100,000,000  would  be  levied  from  the 
French  people. 

If  this  policy  of  making  a  country  independent  of  for. 
eigners  is  to  be  carried  out,  it  will  not  be  sufficient  simply 
to  protect  the  home  manufacturer  of  salt  against  his  foreign 
competitor.  The  home  production  of  numerous  other  articles 
must  be  similarly  fostered ;  the  price  of  all  these  must  be 
artificially  raised  to  such  a  point  as  will  compensate  the 
home  trader  for  the  disadvantages  under  which  he  may 
have  to  carry  on  his  industry,  and  thus  the  loss  which  is 
caused  to  France  by  making  her  independent  of  foreign 
countries  for  her  supplies  of  salt,  may  be  indefinitely  in- 
creased. A  most  serious  burden  might  in  this  way  be  cast 
upon  the  entire  industry  of  a  nation,  and  even  in  periods 
of  profound  peace  a  country  would  thus  be  virtually  mak- 
ing the  most  costly  preparations  for  war.  If  it  were  really 
worth  while  to  take  precautionary  measures  against  a  danger 
so  shadowy  and  remote,  it  would  be  far  cheaper  on  the  eve 
of  hostilities  to  accumulate  stores  of  the  products  which  are 
imported,  than  for  a  people  constantly  to  have  to  bear  the 
serious  loss  which  is  inflicted  on  them  by  articles  which  they 
are  obliged  to  purchase  being  made  unnecessarily  dear. 
When  commerce  is  unhampered  by  restrictions,  the  natural 
action  of  trade  secures  on  the  eve  of  war  the  accumulation 
of  stores  of  commodities  the  importation  of  which  is  likely 
to  be  interfered  with.  The  forces  of  self-interest  would  in 


2G4          PROTECTION  AND  FREE  TRADE. 

this  way  effectually  operate  without  the  intervention  of  the 
government. 

Although  the  supposed  desirability  of  making  a  commu- 
nity independent  of  foreign  countries  is  one  of  the  argu- 
ments most  commonly  advanced  in  favor  of  protection  both 
in  America  and  in  our  colonies,  yet  all  the  reasons  which 
have  been  adduced  against  protection  being  maintained  for 
this  purpose  by  such  a  country  as  France  apply  with  tenfold 
force  to  the  United  States  and  Canada.  Great  as  is  the 
improbability  that  France  can  ever  be  cut  off  from  her  sup- 
plies of  foreign  products,  the  improbability  is  still  greater 
that  the  United  States,  Canada,  and '  Australia,  with  their 
thousands  of  miles  both  of  land  and  sea  frontier,  could 
ever  be  so  completely  surrounded  by  hostile  forces  that 
they  could  not  continue  to  obtain  supplies  from  foreign 
countries. 

3.  It  is  argued  in  favor  of  protection,  and  especially  by 
writers  on  the  subject  in  America,  that  the  cost  of  exporting 
produce  being  paid  by  the  exporting  country,  America 
would  be  placed  at  a  disadvantage  compared  with  England 
if  the  commerce  between  the  two  countries  consisted  chiefly 
in  sending  raw  produce  from  America  in  exchange  for  manu- 
factured goods;  because  the  former,  being  in  proportion  to 
its  value  more  bulky  than  the  latter,  will  be  more  expensive 
to  export. 

It  can  be  readily  shown  that  this  argument  possesses  no 
validity,  for  it  is  based  on  the  erroneous  assumption  that  the 
cost  of  exporting  produce  is  paid  by  the  exporting  country. 
In  order  to  prove  the  fallacy  of  this  assumption,  let  us 
inquire  what  would  be  the  effect  of  reducing  from  6s.  to  3s. 
the  cost  of  sending  a  quarter  of  wheat  from  New  York  to 
Liverpool.  If,  after  this  reduction  in  freight  took  place, 
American  wheat  continued  to  sell  in  England  at  the  same 
price  as  it  did  before,  the  profit  realized  on  every  quarter  of 
American  wheat  sold  in  England  would  be  increased  by  85. 


PROTECTION    AND    FREE   TRADE.  265 

This  opportunity  of  securing  extra  profit  would  inevitably 
cause  increased  supplies  of  American  wheat  to  be  sent  to 
England,  and  this  would  continue  until  the  price  of  Ameri- 
can wheat  was  so  much  reduced  in  England  that  it  was  not 
more  profitable  to  sell  it  there  than  in  America.  The  differ- 
ence in  the  price  of  wheat  in  New  York  and  in  England 
cannot  be  permanently  greater  than  the  cost  of  exporting 
wheat  from  New  York  to  England.  If  therefore  this  cost  is 
reduced,  the  price  of  American  wheat  in  England  must  be 
also  reduced  by  nearly  an  equivalent  amount.  The  fall  in 
price  would  not  probably  be  quite  equal  to  the  reduction  in 
the  cost  of  carriage;  because  as  American  wheat  became 
cheaper  in  England  the  demand  for  it  would  become  greater,. 
and  this  increase  in  demand  might  produce  a  slight  rise  in 
its  price  in  America.  It  still,  however,  is  certain  that  a  les- 
sening of  the  cost  of  carriage  would  produce  a  reduction  of 
price  in  the  importing  country  of  almost  exactly  the  same 
amount,  and  consequently  it  follows  that  the  cost  of  carriage 
instead  of  being  borne,  as  is  assumed  by  American  protec- 
tionists, by  the  exporting  country,  falls  almost  entirely  upon 
the  importing  country.  It  is  obvious  that  the  first  effect  of 
a  rise  in  the  freight  between  America  and  England  would  be 
to  increase  the  price,  to  the  English  consumer,  of  wheat  and 
all  other  produce  imported  from  America;  and  any  reduc- 
tion in  freights  would  in  the  same  way  confer  a  greater 
advantage  upon  England  than  upon  America,  because  the 
price  of  all  American  produce  in  the  English  market  would 
be  reduced  by  an  amount  nearly  equivalent  to  the  saving  in 
the  cost  of  carriage. 

4.  The  next  argument  advanced  in  support  of  protection 
is  that  the  home-trader  needs  protection,  because,  since  he  has 
to  pay  various  taxes  which  cannot  be  levied  from  his  foreign 
competitors,  it  is  necessary,  in  order  to  place  him  in  a  posi- 
tion of  equality  with  them,  that  he  should  receive  some  com- 
pensating advantage. 
12 


266          PROTECTION  AND  FREE  TRADE. 

With  regard  to  this  argument  it  may  be  remarked  that  the 
foreign  producer  has  to  pay  the  taxes  which  are  imposed  in 
his  own  country,  and  it  is  a  mere  matter  of  chance  whether 
these  taxes  in  the  aggregate  are  heavier  than  those  that  are 
imposed  in  the  protectionist  country.  If  protectionists  argue 
that  the  burdens  on  production  are  always  more  onerous  in 
a  protectionist  country,  such  an  admission  may  be  fairly 
regarded  as  a  conclusive  condemnation  of  the  protectionist 
system.  The  aggregate  amount  which  has  to  be  raised  by 
taxation  in  an  old  country,  such  as  England,  is  in  proportion 
to  her  population  far  larger  than  is  required  by  the  Govern- 
ment in  the  United  States.  The  imperial  revenue  raised  in 
England  at  the  present  time  represents  a  charge  of  about  £2 
105.  a  head;  whereas  in  the  United  States  the  charge  is  less 
than  £1  10s.  a  head.  If,  therefore,  the  raising  of  this  larger 
amount  in  England  proves  less  burdensome  to  her  industry 
than  the  raising  of  a  smaller  amount  in  protectionist  coun- 
tries, it  proves  that  their  system  of  taxation  is  radically 
defective. 

It  is  also  worthy  of  notice  that  if  the  home-trader  is  to  be 
protected  in  proportion  to  the  taxation  which  he  has  to  bear, 
each  addition  that  is  made  to  taxation  in  a  protectionist  country 
will  become  doubly  burdensome  to  the  general  community; 
because  it  will  create  a  demand  for  fresh  protection.  Thus, 
if  a  larger  revenue  is  required  in  America,  and  it  becomes 
necessary  to  impose  a  tax  on  dwelling-houses  and  business 
premises,  the  American  manufacturer  would  immediately 
put  forward  a  claim  for  more  protection.  He  might,  for 
instance,  urge  that  before  this  new  taxation  he  was  only  just 
able  to  compete  with  his  foreign  rivals;  the  new  burdens 
which  he  has  to  bear  will  place  him  at  a  disadvantage,  and 
he  will,  therefore,  claim  that  he  should  be  compensated  by 
heavier  import  duties  being  imposed  on  the  goods  which 
come  into  competition  with  those  which  he  produces.  The 
price  of  cotton  and  woolen  goods,  of  iron,  and  of  various 


PROTECTION  AND  FREE  TRADE.          267 

other  manufactured  articles,  would  thus  be  increased  through 
the  imposition  of  these  higher  duties.  Consequently  the 
people  would  be  doubly  taxed:  they  would  not  only  have  to 
provide  the  additional  revenue  which  is  required,  but  they 
would  have  to  pay  a  higher  price  for  all  those  various  articles 
which  were  subjected  to  increased  import  duties.  The 
increase  of  these  duties,  although  extremely  burdensome  to 
the  people,  might  not  yield  any  additional  revenue  to  the 
State;  on  the  contrary,  importation  would  probably  be 
restricted,  and  thus  the  revenue  yielded  might  be  less  than 
it  was  before. 

The  argument  we  are  now  considering  affords  a  striking 
illustration  of  the  mischievous  influence  which  must  be 
exerted  by  protection  if  a  policy  of  commercial  restriction  is 
carried  out  with  logical  consistency.  The  tendency  of  pro- 
tection must  necessarily  be  to  deprive  the  population  of  the 
country  in  which  it  is  maintained  of  the  advantages  arising 
from  any  improvements  in  productive  industry  which  may 
be  introduced  into  other  countries.  Thus,  if  the  production 
of  a  manufactured  article  were  cheapened  in  England,  so 
that  the  English  manufacturer  was  able  to  sell  it  in  France 
at  a  reduction  of  ten  per  cent,  on  its  former  price,  the  French 
manufacturer  might  not  improbably  put  forward  a  claim  to 
higher  protective  duties.  It  would  be  in  strict  accordance 
with  the  principles  of  protection  if  this  claim  were  granted ; 
and  if  it  were  granted  the  French  people  would  lose  the 
benefit  they  would  otherwise  gain  in  being  able  to  purchase 
a  particular  article  at  a  considerably  reduced  price.  In  the 
absence  of  protection,  the  home  manufacturer  who  found 
himself  placed  at  a  disadvantage  in  consequence  of  his  for- 
eign competitor  having  adopted  some  improvement  would  be 
stimulated  to  adopt  the  same  improvement,  so  as  to  be  able 
to  sell  his  goods  at  the  same  rate  as  the  foreigner.  It  would 
thus  become  a  trial  of  skill  against  skill  instead  of  a  compe- 
tition of  skill  against  restriction. 


268  PROTECTION    AND    FREE   TRADE. 

5.  One  of  the  most  important  advantages  claimed  for 
protection  by  its  advocates  is  that  it  not  only  encourages 
various  branches  of  home  industry,  but  discourages  the  trade 
of  foreign  countries  to  a  corresponding  extent. 

Thus  it  is  argued  that  if  iron  were  freely  imported  into 
the  United  States  the  many  millions  which  are  now  expended 
in  America  in  the  purchase  of  iron,  instead  of  being  distrib- 
uted among  the  American  manufacturers  of  iron  and  their 
workpeople,  would  be  sent  to  England.  Such  a  transfer  it 
is  assumed  would  enrich  England  and  impoverish  America. 
It  is,  however,  evident  that  those  who  hold  this  opinion  must 
consider  that  a  community  is  injured  by  any  circumstance 
which  promotes  the  prosperity  of  neighboring  countries. 
Protectionists  may  perhaps  hesitate  to  avow  such  a 
doctrine  when  stated  in  plain  terms,  but  it  can  be  readily 
shown  that  this  is  the  conclusion  to  which  the  principles  they 
profess  inevitably  lead. 

Protection,  as  previously  remarked,  may  be  regarded  as 
a  survival  of  the  mercantile  system  ;  the  opinions  which 
were  propounded  by  its  adherents  bear  a  remarkable  resem- 
blance to  those  which  are  expressed  by  the  protectionists  of 
the  present  day.  Thus  when  they  insist  on  the  harm  which 
would  be  done  to  America  if  iron  were  more  largely  imported 
from  England,  they  constantly  speak  as  if  the  additional 
iron  which  would  be  bought  from  England  would  have  to 
be  paid  for  in  hard  cash,  and  it  seems  to  be  thought  that 
America  would  constantly  have  more  and  more  money 
drained  away  from  her.  Nothing,  however,  is  more  certain 
than  that  if  America  purchased  goods  more  largely  from 
England,  the  English  people  would  in  their  turn  increase 
their  purchases  of  American  produce.  If  it  were  advanta- 
geous for  a  country  as  far  as  possible  to  diminish  the 
quantity  of  products  imported,  that  country  would  derive 
the  maximum  profit  from  foreign  commerce  whose  exports 
were  large  compared  with  her  imports.  To  secure  a  large 


PROTECTION  AND  FREE  TRADE.          269 

excess  of  exports  over  imports  seems  in  fact  to  be  the  goal 
to  reach  which  protectionists  are  ever  striving.  Side  by  side 
with  the  imposition  in  the  United  States  of  innumerable 
import  duties,  many  of  which  are  so  high  as  to  be  prohib- 
itive, such  eager  anxiety  is  shown  that  not  the  slightest 
impediment  should  be  thrown  in  the  way  of  foreign  coun- 
tries freely  purchasing  American  produce,  that  not  only  is 
no  proposal  ever  made  of  levying  an  export  duty  in  the 
United  States,  but  the  imposition  of  such  a  duty  is  forbidden 
by  the  American  constitution.  Amongst  French  protection- 
ists the  same  terror  is  shown  of  an  excess  of  imports  over 
exports.  Thus  in  an  address  of  the  Chamber  of  Commerce 
of  Elboeuf,  protesting  against  the  renewal  of  the  Commercial 
Treaty  with  England,  it  was  stated  that  whereas  in  1875  the 
exports  of  France  exceeded  her  imports  by  297  million 
francs,  in  the  next  year  the  imports  were  in  excess  of  the 
exports  by  271  million  francs,  and  it  was  said  that  conse- 
quently there  had  been  a  transfer  in  this  period  of  nearly 
600  million  francs  "to  the  prejudice  of  France."  But  if  a 
country  is  benefited  by  its  exports  and  injured  by  its  imports, 
we  are  led  to  the  conclusion  that  a  community  is  enriched  in 
exact  proportion  to  the  smallness  of  the  return  which  it 
receives  in  exchange  for  the  produce  which  it  sends  abroad. 
But  if  this  were  the  case  a  community  would  derive  the  maxi- 
mum advantage  from  foreign  commerce  when  in  exchange 
for  various  useful  products  which  it  exported  it  received 
scarcely  anything  except  money.  Such  a  result  might  no 
doubt  be  brought  about  if  a  protectionist  policy  were  carried 
out  with  sufficient  completeness.  Suppose  for  instance  that 
protective  duties  were  increased  in  the  United  States ;  the 
quantity  of  articles  imported  from  England  and  other  coun- 
tries might  be  greatly  diminished,  while  the  demand  of 
these  countries  for  American  produce  would  continue.  If 
English  harvests,  for  example,  were  deficient  and  America 
had  wheat  to  spare,  this  wheat  would  be  gladly  purchased 


270          PROTECTION  AND  FREE  TRADE, 

by  the  English  people.  They  would  not  deprive  themselves 
of  bread  because  America  had  increased  her  import  duties. 
If;  however,  produce  continued  to  be  thus  exported  while 
imports  were  more  and  more  reduced,  a  larger  portion  of 
these  exports  would  have  to  be  paid  for  with  money,  and 
a  larger  amount  of  money  would  consequently  have  to  be 
annually  transmitted  to  America.  This  being  the  case,  the 
question  is  at  once  suggested,  would  such  a  transmission 
of  money  be  more  advantageous  to  America  than  if,  in 
exchange  for  the  products  she  exported,  she  obtained 
various  manufactured  goods  and  other  articles  which  would 
minister  to  the  wants  and  enjoyments  of  her  people  ? 

The  value  of  gold  and  silver  is  determined  by  the  same 
laws  as  those  which  regulate  the  value  of  other  articles  of 
mineral  produce.  If  money  were  constantly  poured  into 
a  country  in  the  manner  just  supposed,  its  supply  would 
be  increased,  and  its  value  would  proportionately  diminish. 
Hence,  a  commerce  which  consisted  in  exporting  useful 
products  in  exchange  for  money,  instead  of  being  peculiarly 
beneficial  would  really  be  specially  disastrous  to  a  country; 
for  produce  would  be  sent  abroad  which  might  be  used 
in  furnishing  the  people  with  the  necessaries  and  enjoy- 
ments of  life  ;  and  in  exchange  for  the  real  and  tangible 
advantages  which  were  thus  parted  with,  nothing  would 
be  secured  but  an  increased  supply  of  money,  with  a 
consequent  depreciation  in  its  value,  producing  a  rise  in 
general  prices. 

The  policy  having  been  once  commenced  of  creating 
a  "  favorable  balance  of  trade "  by  discouraging  imports, 
could  not  be  continued  without  imposing  more  and  more 
onerous  and  mischievous  restrictions  on  commerce.  The 
rise  in  general  prices  which  it  has  been  shown  would  occur 
in  America  if  she  were  chiefly  paid  for  her  exports  with 
money  and  not  with  produce,  would  obviously  tend  to 
diminish  the  amount  of  her  exports  and  to  increase  her 


PROTECTION  AND  FREE  TRADE.          271 

imports.  If  wheat  and  maize  and  other  articles  became 
dearer  in  America  a  less  quantity  of  these  articles  would 
be  purchased  by  other  countries,  and  consequently  her 
exports  would  diminish.  At  the  same  time  the  rise  in 
prices  in  America  might  make  it  profitable  for  England 
and  other  countries  to  send  goods  there  which  before  could 
not  be  sent  except  at  a  loss,  and  this  increase  in  imports 
would  cause  the  imposition  of  higher  protective  duties  to 
be  demanded. 

The  case  which  has  just  been  investigated  affords  another 
example  of  the  fact  that  any  injury  which  a  country  inflicts 
on  the  commerce  of  other  nations,  instead  of  yielding  her 
any  advantage,  is  sure  sooner  or  later  to  react  upon  herself, 
and  generally  with  redoubled  force.  Protectionists,  as  we 
have  seen,  are  always  most  anxious  to  promote  exports  and 
to  discourage  imports  ;  and  yet  every  new  protective  duty 
which  is  imposed  is  just  as  effectual  in  impeding  an  export 
trade  as  if  a  duty  were  levied  on  every  article  which  is  sent 
abroad.  It  has,  for  instance,  just  been  shown  that  an  inevit- 
able result  of  a  protectionist  policy  is  to  make  the  articles 
which  are  exported  dearer,  and  consequently  to  diminish 
the  foreign  demand  for  them.  This  falling  off  in  the  foreign 
demand  will  still  further  be  aggravated  by  the  loss  which  a 
country  inflicts  on  others  besides  herself  by  the  maintenance 
of  a  protective  tariff.  England  no  doubt  suffers  seriously 
from  the  protective  duties  of  America,  but  the  more  serious 
the  injury  which  is  thus  inflicted  on  her,  and  the  greater  the 
loss  of  wealth  which  it  causes,  the  more  will  her  power  of 
purchasing  the  goods  which  America  wishes  to  send  her 
be  diminished.  If  trade  improved  in  England,  if  employ- 
ment became  more  abundant,  if  profits  increased  and  wages 
advanced,  there  is  not  a  single  article  of  general  consump- 
tion for  which  the  demand  would  not  increase ;  and  this 
increase  in  demand  is  just  as  certain  to  take  place,  whether 
the  article  is  made  at  home  or  whether  it  is  imported.  , 


272         PROTECTION  AND  FREE  TRADE. 

As  it  is  probable  that  protection  derives  special  encour- 
agement from  the  erroneous  opinions  so  often  entertained 
as  to  the  real  significance  to  be  attributed  to  what  is  termed 
"the  balance  of  trade,"  the  question  will  be  again  referred 
to  in  the  next  chapter,  in  which  will  be  considered  the 
subject  of  industrial  depression.  I  think  it  will  then  be 
seen  that  an  unfavorable  balance  of  trade  need  not  neces- 
sarily indicate  that  there  is  anything  unsatisfactory  in  the 
industrial  condition  of  a  country ;  for  the  normal  condition 
of  English  trade  is  for  the  imports  largely  to  exceed  the 
exports,  and  reasons  will  be  adduced  to  show  that  this 
excess  may  be  taken  as  one  of  the  surest  evidences  of  the 
remarkable  accumulation  of  the  wealth  of  England  in  recent 
times. 

6.  It  is  argued  by  protectionists  that  a  protective  import 
duty  is  ultimately  almost  entirely  paid  by  the  foreign  pro- 
ducer, and  it  is  therefore  supposed  that  protection  secures  the 
double  advantage  of  compelling  foreign  countries  to  con- 
tribute to  the  home  revenue,  while  at  the  same  time  encour 
agement  is  given  to  home  industry. 

This  argument  is  supported  with  much  ingenuity  by  a 
well-known  American  economist,  Mr.  Francis  Bowen.*  It 
is  contended  by  him  that  if  America  imported  £40,000,000 
worth  of  manufactured  goods  when  an  import  duty  of  10 
per  cent,  was  levied,  and  if  when  this  duty  was  raised  to 
35  per  cent,  only  £20,000,000  worth  of  goods  were  im- 
ported, the  Government  would  not  only  obtain  a  larger 
revenue  from  the  smaller  importation,  but  England  in 
consequence  of  the  falling  off  in  the  demand  for  her  goods 
would  be  compelled  to  sell  them  at  a  lower  price.  It  is 
therefore  urged  that  the  effect  of  a  protective  duty  is  to 
enable  a  country  to  purchase  foreign  produce  at  a  cheaper 
rate,  and  consequently  the  country  which  maintains  pro- 


*  See  American  Political  Economy,  by  Francis  Bowen,  p.  487. 


PROTECTION  AND  FREE  TRADE.          273 

tection  is  placed  in  a  position  to  make  a  better  bargain 
with  those  from  whom  this  produce  is  bought.  In  this 
reasoning  the  fact  is  altogether  ignored  that  although  the 
price  which  the  English  may  obtain  for  their  goods  is 
somewhat  less  than  it  was  before  the  duty  was  raised,  yet 
this  reduction  in  price  is  extremely  trifling  compared  with 
the  extent  to  which  the  price  is  raised  in  the  importing 
country  in  consequence  of  the  increase  of  duty;  therefore, 
although  those  who  purchase  the  article  in  America  may 
not  find  its  price  advanced  by  the  full  amount  of  the 
increased  duty,  the  advance  will  yet  be  sufficient  to  cause 
by  far  the  greater  part  of  the  duty  to  fall  upon  those  who 
consume  the  article  in  America,  and  not  upon  those  who 
produce  it  in  England. 

In  order  to  show  this,  let  it  be  assumed,  following  the 
example  given  by  Mr.  Bo  wen,  that  100,000  pieces  of 
woolen  cloth,  the  value  of  which  in  England  is  £1,000,000, 
are  exported  from  England  to  America  when  the  import* 
duty  is  10  per  cent.  Suppose  the  cost  of  the  carriage  of 
this  cloth  is  £1  a  piece,  and  the  duty  being  10  per  cent, 
will  also  be  £  L  a  piece.  Consequently  the  price  at  which 
the  cloth  will  sell  in  America  will  be  approximately  £12 'a 
piece,  because  the  price  must  be  sufficient  to  provide  a 
compensation  for  the  cost  of  carriage  and  for  the  duty.  If 
the  price  were  more  than  sufficient  to  do  this  it  would  be 
more  profitable  to  sell  cloth  in  America  than  in  England, 
and  the  price  would  be  inevitably  forced  down  by  those 
who  had  cloth  to  sell  being  naturally  anxious  to  secure  the 
advantage  of  this  extra  profit.  If,  on  the  other  hand,  the 
difference  in  the  price  of  cloth  in  the  American  and 
English  markets  were  not  sufficient  to  pay  the  cost  of 
carriage  and  the  duty,  then  it  would  be  less  profitable  to 
sell  English  cloth  in  America  than  in  England,  and  English 
manufacturers  would  consequently  refuse  to  export  cloth. 
When  the  duty  is  raised  from  10  per  cent,  to  35  per  cent,, 
12* 


274          PROTECTION  AND  FREE  TRADE. 

a  piece  of  cloth  which,  was  worth  £10  in  England  would 
have  to  be  sold  in  America  not  at  £12  but  at  £14  10s., 
because  the  difference  between  its  price  in  the  two  markets 
must  be  sufficient  to  cover  the  duty  as  well  as  the  cost  of 
carriage;  the  cost  of  carriage  is  still  £1,  but  the  duty, 
having  been  raised  from  10  per  cent,  to  35  per  cent.,  is 
£3  105.  The  protectionists,  however,  are  no  doubt  right 
in  their  contention  that  with  this  great  increase  in  the  price 
of  English  cloth  in  America  there  would  be  a  consider, 
able  falling  oif  in  the  American  demand.  Accepting  the 
hypothesis  on  which  the  argument  advanced  by  Mr.  Bo  wen 
is  based,  let  it  be  assumed  that  the  importation  of  English 
cloth  into  America  is  reduced  from  100,000  to  50,000 
pieces.  This  diminution  in  the  demand  for  cloth  would 
undoubtedly  affect  its  price  in  England,  but  the  reduction 
in  price  would  inevitably  be  small  when  compared  with 
the  increase  of  duty.  The  price  cannot  permanently  fall 
below  such  a  point  as  will  make  the  manufacture  of  cloth 
less  remunerative  than  other  branches  of  industry. 

It  would  be  an  excessive  estimate  to  suppose  that  a  falling 
oif  to  the  extent  of  one-half  in  one  branch  of  the  foreign 
demand  for  English  cloth,  resulting  from  an  increase  of  the 
American  protective  duties,  would  cause  a  reduction  in 
price  of  10  per  cent.  But  even  if  it  is  assumed  that  the 
price  is  reduced  by  this  amount,  a  piece  of  cloth  which 
before  was  worth  £10  in  England  would  now  be  worth  £9, 
and  its  price  in  the  American  market  would  be  £13  3s. 
instead  of  £14  10s.;  because  the  difference  in  its  price  in 
the  two  markets  must  be  sufficient  to  pay  the  cost  of 
carriage,  which  is  £1,  and  the  duty,  which  is  £3  3s.,  being 
35  per  cent,  on  the  value  of  the  cloth  which  is  now  £9.  It 
therefore  appears  that  although  the  price  of  English  cloth 
in  America  is  not  advanced  by  the  full  amount  of  the  in- 
crease of  duty,  yet  the  price  is  raised  from  £12  to  £13  3s.; 
in  fact  cloth  is  made  so  dear  that  the  American  people  can 


PROTECTION  AND  FREE  TRADE.          275 

only  afford  to  buy  half  as  much  from  England  as  they 
formerly  purchased.  An  injury  will  no  doubt  be  inflicted 
on  English  trade  by  this  falling  off  in  the  American  demand; 
it  must,  however,  be  borne  in  mind  that  the  loss  which  may 
be  thus  caused  to  a  special  branch  of  English  industry  may 
bring  with  it  a  compensating  advantage.  Thus  it  has  been 
assumed  that  owing  to  less  cloth  being  exported  to  America, 
cloth  becomes  cheaper  in  England  by  10  per.  cent.  Every 
one  therefore  who  wishes  to  purchase  English  cloth,  whether 
at  home  or  abroad,  will  be  benefited  by  its  being  thus  made 
cheaper.  With  this  fall  in  price,  the  general  demand  will 
increase;  this  will  inevitably  lead  to  a  considerable  recovery 
in  the  price  of  cloth,  and  this  circumstance  will  go  far  to 
compensate  the  English  manufacturers  for  the  falling  off  in 
the  American  demand. 

It  therefore  appears  that  instead  of  a  protective  duty 
being  chiefly  paid,  as  American  and  other  protectionists 
suppose,  by  foreign  countries,  such  a  duty  must  cause  a 
much  more  serious  loss  to  the  community  which  imposes  it 
than  it  causes  to  those  countries  who  export  the  produce 
on  which  the  duty  is  levied.  Thus  it  has  been  shown  in 
the  foregoing  example,  that  whatever  loss  might  ultimately 
be  caused  to  the  English  cloth  manufacturers  by  an  increase 
of  the  American  import  duties  on  cloth,  this  loss  is,  so 
far  as  the  English  people  are  concerned,  accompained  by 
the  advantage  that  they  are  able  to  purchase  cloth  at  a 
somewhat  lower  price.  One  special  branch  of  English 
trade  is  injured;  whereas  the  general  body  of  English 
consumers  are  benefited.  In  America,  however,  where  the 
higher  protective  duty  is  imposed,  exactly  the  reverse  takes 
place.  Whatever  effect  the  increased  duty  may  have  upon 
the  American  cloth  manufacturers,  the  increase  of  the  duty 
causes  a  most  serious  loss  to  the  American  people. 

The  arguments  that  are  adduced  in  favor  of  protection 
so  habitually  ignore  the  interests  of  the  general  consumer, 


27 6  PEOTECTION    AND    FllEE   TRADE. 

that  it  is  of  the  first  importance  to  remember  that  in  the 
case  just  investigated,  the  increase  of  the  protective  duty 
on  cloth  would  not  simply  raise  the  price  of  imported  cloth, 
but  would  produce  a  corresponding  advance  in  the  price  of 
all  the  cloth  which  was  purchased  by  the  American  people, 
whether  of  home  or  of  foreign  manufacture.  If,  therefore, 
of  the  entire  cloth  used  in  America,  only  one-twentieth  were 
imported,  the  protective  duty  on  cloth  would  impose  a 
fine  on  the  American  people  twenty  times  as  large  as  the 
amount  which  the  import  duty  yielded  to  the  revenue.  The 
injury  therefore  which  is  done  to  a  foreign  country  by  the 
imposition  of  a  protective  duty,  is  trifling  compared  with 
the  injury  which  the  country  imposing  the  duty  inflicts  on 
herself. 

7.  A  striking  illustration  is  afforded  of  the  opposite 
aspects  under  which  the  advantages  of  protection  are  repre- 
sented by  its  advocates,  when  it  is  argued  that  the  general 
body  of  consumers  cannot  be  injured  by  protection,  because 
profits  and  wages  are  not  higher  in  the  protected  industries 
than  in  those  which  are  not  protected. 

The  employment  of  such  an  argument  is  imprudent, 
because  the  fallacy  which  it  involves  can  be  readily  ex- 
plained; while  the  admission  it  contains,  as  to  the  equality 
of  wages  and  of  profits  in  protected  and  unprotected 
industries,  affords  a  complete  refutation  of  many  of  the 
arguments  on  which  most  reliance  is  placed  by  those  who 
support  protection.  Such  an  admission  in  fact  disposes  of 
a  very  considerable  number  of  the  reasons  which  are  ordi- 
narily urged  in  defense  of  protection.  If  it  is  conceded 
that  profits  and  wages  are  not  higher  in  trades  which  are 
protected  than  in  those  which  are  not  protected,  it  at  once 
becomes  evident,  as  we  have  attempted  to  show  in  a  previous 
chapter,  that  if  commodities  are  made  dearer  by  protection, 
the  loss  which  is  thus  caused  to  the  consumer  of  these  com- 
modities is  not  counterbalanced  by  any  special  advantage 


PROTECTION  AND  FREE  TRADE.          277 

being  enjoyed  by  those  who  supply  the  capital  and  labor 
requisite  to  produce  them.  When  the  price  of  any  product 
is  increased  through  protection,  the  extra  price  does  not 
represent  higher  profits  or  wages,  but  is  simply  an  equivalent 
for  increased  cost  of  production. 

.  In  order  to  prove  the  fallacy  involved  in  the  argument 
that  the  consumer  cannot  be  injured  by  protection  because 
the  imposition  of  a  protective  duty,  in  any  branch  of 
industry,  does  not  increase  its  wages  and  profits  beyond  the 
average  rate,  it  is  only  necessary  to  consider  what  would 
be  the  effect  of  again  levying  in  England  an  import  duty  on 
corn.  As  previously  explained,  the  inevitable  effect  of  sucn 
a  duty  would  be  to  raise  the  price  of  corn  in  England. 
Less  foreign  corn  would  be  imported,  and  more  would  be 
grown  on  our  own  soil.  This  rise,  however,  in  the  price  of 
corn,  as  is  admitted  by  the  protectionists  in  the  argument 
we  are  now  considering,  would  not  increase  the  profits  of  the 
farmer;  the  extra  price  which  he  received  for  his  corn  having 
to  be  devoted  to  pay  the  additional  rent  which  now  would 
be  demanded  from  him,  he  would  gain  nothing;  but  the  fact 
that  he  is  not  benefited,  would  not  in  the  slightest  degree 
lessen  the  loss  which  would  be  inflicted  on  the  general  body 
of  the  consumers;  for,  in  consequence  of  the  protective 
duty,  every  one  would  find  that  he  had  to  pay  more  for  the 
bread  he  purchased. 

8.  It  is  alleged  that  protection  must  be  economically 
advantageous,  because  when  a  country  produces  commodities 
for  itself  instead  of  obtaining  them  from  abroad,  the  labor 
employed  in  transporting  them  is  saved,  and  this  labor  is 
assumed  to  be  unproductive. 

There  is,  however,  not  the  slightest  foundation  for  the 
assumption  that  the  labor  employed  in  transporting  a  com- 
modity is  in  any  degree  in  ore  unproductive  than  the  labor 
which  is  employed  in  actually  producing  it.  The  labor  of 
the  ploughman  who  ploughs  the  land  on  which  wheat  is 


278          PROTECTION  AND  FREE  TRADE. 

grown,  is  not  more  useful  or  essential  than  is  the  labor  of 
those  who  br.'ng  the  wheat  to  the  place  where  it  is  required 
for  consumption.  The  finest  fields  of  wheat  would  be 
perfectly  worthless  if  the  wheat  had  to  be  left  on  the  fields 
where  it  grew.  There  may  be  millions  of  tons  of  coal  at 
the  pit's  mouth,  and  this  coal  would  be  of  no  more  use  than 
if  it  had  never  been  dug,  unless  there  is  labor  to  convey  it 
to  the  places  where  it  is  wanted. 

It  is  supposed  that  a  coal-field  extends  under  the  entire 
town  of  Liverpool.  If  this  is  the  case,  it  would  be  possible 
for  the  people  of  Liverpool  to  obtain  coal  close  to  their  own 
doors.  This  coal,  however,  being  at  a  much  greater  depth 
than  the  coal  in  other  coal-fields  in  the  locality,  would  be 
more  expensive  to  work.  Let  it  be  assumed  that  the  addi- 
tional cost  of  working  the  coal  will  be  55.  a  ton,  and  that 
the  cost  of  carrying  coal  from  the  coal-fields  which  now 
supply  Liverpool  is  2s.  a  ton.  It  is  obvious  that  this  cost  of 
carriage  would  be  saved,  if  the  coal  immediately  below 
Liverpool  were  worked.  But  in  order  to  save  this  2s.,  55. 
would  have  to  be  spent;  and,  therefore,  the  net  loss  on  each 
ton  of  coal  used  in  Liverpool  would  be  85. 

It  therefore  appears  that  saving  the  labor  employed  in 
transporting  produce  is  not  necessarily  economically  advan- 
tageous, for  the  amount  thus  saved  may  be  altogether  inade- 
quate to  the  increased  cost  involved  in  obtaining  a  com- 
modity under  more  unfavorable  conditions. 

9.  Protection  has  been  represented  to  the  working  classes 
in  America  as  conferring  a  great  benefit  upon  them,  because 
it  is  said  that  wages  are  higher  in  the  protected  industries  in 
America  than  they  are  in  the  same  industries  in  free-trade 
England. 

Even  if  the  difference  in  the  remuneration  of  labor  in  the 
United  States  and  in  England  had  continued  to  be  as  great 
as  it  was  formerly,  it  is  obvious,  after  what  was  stated  when 
considering  the  seventh  argument,  that  this  difference  in 


PROTECTION  AND  FREE  TRADE.          279 

wages  could  not  have  been  due  to  protection.  It  was  shown 
that  protectionists  themselves  admit  that  wages  are  not 
higher  in  protected  than  in  unprotected  industries;  con- 
sequently the  greater  remuneration  which  labor  obtains  in 
one  country  than  in  the  other  must  be  due  to  causes  which 
are  independent  of  protection,  and  which  exert  a  similar 
influence  upon  all  employments.  A  consideration  of  some 
of  the  more  prominent  features  in  the  economic  condition 
of  England  and  America,  respectively,  will  at  once  enable  us 
not  only  to  say  what  these  causes  are,  but  will  also  show 
that  far  from  protection  increasing  the  remuneration  of 
labor  in  the  United  States,  it  is  gradually  depriving  labor  of 
so  much  of  its  productiveness,  as  largely  to  reduce  the 
difference  between  the  remuneration  received  by  the  Ameri- 
can and  the  English  laborer  respectively. 

The  most  striking  point  of  difference  in  the  economic 
position  of  England  and  the  United  States,  is  the  compara- 
tively small  quantity  of  fertile  land  which  is  possessed  by 
the  former  country  in  proportion  to  its  population.  The 
quantity  of  food  which  is  grown  in  England  would  be 
altogether  inadequate  for  the  support  of  its  population;  and 
each  year  we  are  becoming  more  and  more  dependent  upon 
America  to  make  good  this  deficiency  in  our  supplies  of 
food.  It  is  calculated  that  the  quantity  of  wheat  annually 
consumed  in  England  is  about  22,000,000  quarters;  the 
yield  of  our  own  harvest  has  often  been  not  more  than 
9,000,000  quarters,  and  consequently  a  considerably  larger 
quantity  has  to  be  imported  than  is  produced  by  our  own 
soil.  The  quantity  of  meat,  butter,  cheese,  and  other 
articles  of  food  which  are  annually  imported  from  America 
is  rapidly  increasing.  It  is  not,  however,  only  with  regard 
to  food  that  England  has  so  largely  to  depend  on  foreign 
countries  for  the  supplies  she  requires.  A  great  part  of  the 
raw  material  which  is  used  in  many  of  her  most  important 
manufacturing  industries  is  not  obtained  from  her  own  soil- 


280          PROTECTION  AND  FREE  TRADE. 

For  instance,  a  very  large  portion  of  the  wool  which  is 
annually  manufactured  in  England  is  of  foreign  growth; 
and  the  English  climate  not  being  suited  to  the  production 
of  silk  and  cotton,  all  the  raw  silk  and  raw  cotton  which 
she  requires  must  necessarily  be  imported.  So  large  a 
portion  of  this  cotton  is  obtained  from  the  United  States, 
that  the  value  of  the  raw  cotton  which  is  imported  thence 
has  in  some  years  amounted  to  more  than  £30,000,000.  It 
therefore  appears  that  the  United  States,  when  compared 
with  England,  enjoys  the  great  advantage  of  possessing  a 
more  abundant  and  cheaper  supply,  not  only  of  food,  but 
also  of  the  products  which  provide  the  raw  material  of 
the  most  important  branches  of  manufacturing  industry.  It 
would  seem  necessarily  to  follow  that  wages  and  profits 
would  both  be  much  higher  in  the  United  States  than  in 
England.  Fertile  land  is  so  plentiful  in  the  former  country, 
that  it  can  be  obtained  in  any  quantity  for  the  payment  of 
almost  a  nominal  sum;  whereas  those  in  England  who  wish 
to  cultivate  land  often  have  to  pay  in  a  single  year,  in  rent, 
as  much  as  would  represent  the  fee-simple  of  land  of  the 
same  quality  in  the  United  States.  In  the  one  country  the 
entire  produce  of  the  land  may  be  devoted  to  remunerate 
capital  and  labor:  whereas  in  the  other  country  a  not  incon- 
siderable portion  of  the  produce  has  to  be  appropriated 
as  rent.  The  amount  which  an  English  farmer  has  to  pay 
in  rent  is  often  equivalent  to  the  entire  amount  which  he 
expends  in  wages.  Consequently,  there  will  be  a  smaller 
aggregate  sum  left  to  be  divided  in  the  form  of  profits  and 
wages  amongst  those  who  have  supplied  the  capital  and 
labor  requisite  for  the  cultivation  of  the  land.  It  therefore 
appears  that  a  higher  rate  of  profits  and  wages  must  be 
yielded  by  agriculture  in  the  United  States  than  in  Eng- 
land, and  as  it  has  been  proved  that  wages  and  profits  in 
different  industries  in  the  same  country  approximate  to 
equality,  it  follows  that  capital  and  labor  ought  both  to 


PROTECTION  AND  FREE  TRADE.          281 

obtain  a  higher  remuneration  in  the  United  States  than  in 
England.  This  higher  remuneration  is  due  to  circumstances 
which  are  altogether  independent  of  protection.  It  can, 
moreover,  be  shown  that  an  influence  of  so  exactly  an  oppo- 
site kind  is  exerted  by  protection,  that  at  the  present  time 
it  is  imposing  on  the  industrial  classes  in  America  a  burden, 
which  to  a  considerable  extent  is  neutralizing  the  advantages 
conferred  upon  them  by  the  possession  of  those  great  nat- 
ural resources  to  which  attention  has  just  been  directed. 

After  what  has  been  stated  in  a  previous  chapter,  the 
prejudicial  effect  which  must  be  exercised  upon  the  remu- 
neration of  labor  by  such  a  protectionist  tariff  as  that  which 
is  now  maintained  in  the  United  States  will  be  readily 
understood.  A  protective  duty,  by  making  the  product  on 
which  it  is  imposed  unnecessarily  dear,  virtually  levies  a  tax 
from  all  those  who  purchase  it.  When  the  commodities 
which  are  subjected  to  such  a  duty  are  those  in  general  use, 
the  effect  of  the  duty  is  precisely  the  same  as  if  an  income 
tax  were  levied  from  the  entire  community.  Such  a  tax 
cannot  be  adjusted  or  equalized  as  is  the  case  with  the 
income  tax  in  our  own  country.  Small  incomes  cannot  be 
exempted;  for,  however  poor  a  man  may  be,  the  tax  will 
fall  with  unerring  certainty  on  all  that  portion  of  his  income, 
or  his  wages,  which  is  expended  in  the  purchase  of  those 
articles  which  are  protected.  But  this  is  not  the  only  tax 
which  protection  compels  a  community  to  pay.  When  the 
instruments  and  the  plant  of  industry  are  made  more  costly, 
the  products  of  that  industry  necessarily  become  more  ex- 
pensive. Iron,  copper,  and.  timber  are,  as  we  have  seen,  all 
made  dearer  in  the  United  States  by  protection.  Conse- 
quently, the  machinery  which  is  made  of  copper  and  iron 
becomes  more  expensive;  the  cost  of  buildings  also,  in  the 
construction  of  which  iron  and  timber  are  used,  is  increased; 
and  this  being  the  case,  those  who  pay  a  higher  price  for 
this  machinery  must  be  compensated  by  obtaining  a  higher 


282          PROTECTION  AND  FREE  TRADE. 

price  for  the  products  which  they  manufacture;  and  those 
who  erect  the  buildings  will  be  able  to  claim  an  increased 
rent,  in  order  that  they  may  be  adequately  remunerated  for 
the  additional  cost  of  their  construction. 

Protection  is  thus,  in  a  thousand  different  ways,  per- 
petually  taxing  the  American  people.  There  is  not  one 
single  branch  of  her  industry  on  which  it  does  not  impose  a 
penalty  more  or  less  severe.  Its  influence  may  he  traced 
far  and  wide  over  the  country.  It  increases  the  cost  of  the 
implements  by  which  the  land  in  the  far  West  is  tilled ;  it 
causes  a  higher  rent  to  be  paid  by  the  poorest  artisan  lodged 
in  a  back  street  in  New  York.  The  burden  thus  cast  upon 
the  industrial  classes  is  so  severe  as  to  neutralize  to  a  con- 
siderable extent  her  great  natural  advantages.  Although 
wages  are  considerably  higher  in  the  United  States  than  in 
England,  much  of  the  advantage  which  labor  should  derive 
from  these  additional  wages  is  lost  in  consequence  of  almost 
every  article  in  general  use  being  made  unnecessarily  dear 
by  protective  duties.  The  wages  of  an  American  workman 
are  in  this  way  deprived  of  an  important  part  of  their  pur- 
chasing power,  and  when  trade  becomes  depressed  the  effects 
of  industrial  depression  are  from  this  cause,  as  will  be  sub- 
sequently shown,  most  seriously  aggravated. 

10.  When  protection  has  once  been  introduced  into  a 
country,  it  is  argued  that  it  should  embrace  as  many  indus- 
tries as  possible;  because  if  only  one  industry  were  protected, 
the  general  public  would  receive  no  compensation  for  the 
higher  price  which  they  would  have  to  pay  for  the  product 
of  this  particular  industry.  If,  however,  protection  embraces 
the  entire  industry  of  the  country,  each  industrial  class  is  in 
its  turn  benefited,  and  is  amply  compensated  for  the  in- 
creased  dearness  of  various  articles.* 

*  The  manufacturing  interests  are  beginning  to  regard  coal,  iron  ore,  pig  iron, 
wool,  and  other  articles  of  domestic  production  as  raw  articles,  not  to  be  pro- 
tected by  duty.  If  this  new  doctrine  should  get  a  foothold  it  would  destroy  the 
whole  protective  policy  of  the  government.  The  rule  of  protection  must  extend 


PROTECTION  AND  FREE  TRADE.          283 

This  argument  has  been  enforced  with  much  ingenuity 
by  M.  Alby,  a  well-known  French  protectionist.  He  con- 
tends  that  if  the  iron  interest  alone  were  protected  in  France, 
the  policy  would  be  absolutely  indefensible,  because  every 
one  in  France  would  have  to  pay  more  for  iron  in  order  to 
give  an  advantage  to  those  engaged  in  the  French  iron 
trade;  but  he  urges  that  this  objection  is  entirely  removed 
if  all  industries  are  equally  protected.  For  instance,  if  the 
cloth  trade  is  protected,  the  benefit  which  those  engaged  in 
it  are  supposed  to  derive,  more  than  compensates  them  for 
the  loss  they  have  to  bear  in  paying  an  increased  price  for 
iron.  It  has  been  shown  with  great  clearness  by  the  late 
Professor  Cairnes,*  that  it  is  impossible  to  extend  protec- 
tion to  all  industries  in  the  manner  here  contemplated;  and 
even  if  such  an  extension  were  practicable,  the  compensation 
which  it  is  assumed  the  community  would  receive,  would  be 
entirely  illusory.  It  is  obvious,  in  the  first  place,  that  this 
argument  entirely  overlooks  the  interests  of  the  professional 
and  other  classes  who  obtain  their  incomes  otherwise  than 
by  trade.  A  physician  with  £1,000  a  year,  or  a  policeman 
with  £1  a  week,  would  find  that  almost  everything  he  pur- 
chased was  made  dearer  by  protection;  while  his  income  was 
in  no  way  increased  by  it. 

With  regard  to  the  impracticability  of  extending  protec- 
tion to  all  industries,  it  is  only  necessary  to  remark  that  in 
many  industries  there  is  no  foreign  competition,  and  it  is 
consequently  impossible  to  extend  protection  to  them.  For 
example:  wine  is  not  imported  into  France,  and  wheat  is 
not  imported  into  America.  An  import  duty  imposed  upon 

to  all  labor  alike;  to  the  labor  of  the  farmer  in  producing  wool,  and  to  the  labor 
of  the  miner  in  digging  coal,  and  if  it  is  denied  to  the  farmer  and  miner  it  can- 
not justly  be  maintained  in  favor  of  the  manufacturer.  It  is  labor  that  is  to  be 
protected,  and  not  capital.  It  is,  indeed,  more  important  to  develop  the  natural 
resources  of  the  country  in  the  production,  mining,  and  manufacture  of  such 
articles  as  wool  coal  and  iron,  than  to  protect  the  higher  forms  of  production, 
where  cheap  labor  is  indispensable. — John  Sherman,  1884. 
"Leading  Principles  of  Political  Economy,  p.  454,  et  seq. 


284          PROTECTION  AND  FREE  TRADE. 


wine  in  France,  or  on  wheat  in  America,  would  therefore  be 
of  no  advantage  to  the  French  wine-grower,  or  the  Ameri- 
can farmer.  They  are  consequently  precluded  from  receiv- 
ing any  compensation  for  the  higher  price  which  they  are 
compelled  to  pay  for  the  various  articles  that  are  made 
dearer  through  the  operation  of  protective  duties. 

11.  Protection  is  defended  in  America  and  the  Colonies 
on  the  ground  that,  as  wages  are  higher  there  than  in  Eng- 
land, the  American  and  colonial  traders  require  protection 
in  order  to  place  them  in  a  position  of  equality  with  their 
English  competitors. 

This  claim  for  protection  is  evidently  based  on  the  assump- 
tion that  the  amount  of  wages  paid  to  laborers  is  the  only 
element  of  which  account  need  be  taken  when  considering 
the  cost  of  producing  a  particular  article.  The  fallacy  of 
such  an  opinion  at  once  becomes  apparent,  when  it  is  re- 
membered that  agriculture  is  the  particular  branch  of  indus- 
try in  which  the  difference  between  the  wages  paid  in 
England  and  those  paid  in  America  or  Australia  is  the 
greatest.  And  yet  it  is  in  agriculture  that  America  and 
Australia  can,  without  the  slighest  protection,  compete  most 
successfully  against  England.  The  Illinois  or  Australian 
farmer  has  to  pay  his  laborers  at  least  two  or  three  times 
as  much  as  is  paid  by  the  Dorsetshire  or  Wiltshire  farmer, 
and  yet  wheat  can  be  produced  much  more  cheaply  in 
Australia  or  America  than  in  England.  It  is  therefore 
obvious  that  other  circumstances,  besides  the  amount  of 
wages  which  may  be  paid,  determine  the  cost  at  which 
any  particular  article  can  be  produced;  if  this  were  not 
so,  the  American  farmer  would  have  a  much  stronger 
claim  to  protection  against  the  cheap  labor  of  England 
than  the  American  manufacturer.  The  efficiency  of  labor 
must  manifestly  exert  quite  as  much  influence  on  the 
cost  of  production  as  the .  amount  of  wages  which  the 
laborers  receive.  The  great  abundance  of  cheap,  fertile 


PROTECTION  AND  FREE  TRADE.          285 


land  in  Australia  and  America  so  much  promotes  the 
efficiency  or  productiveness  of  the  labor  employed  in  its 
cultivation,  that  the  cost  of  producing  wheat  and  other 
agricultural  products  is  much  less  than  in  England,  where 
considerably  lower  wages  are  paid  to  farm  laborers. 
Again,  with  regard  to  mining  industry,  it  is  evident  that 
various  circumstances,  such  for  instance  as  the  richness  of 
the  mineral  deposits  and  their  depth  from  the  surface, 
must  exercise  a  far  greater  effect  upon  the  cost  of  pro- 
duction than  the  wages  which  may  happen  to  be  paid  to 
the  miners.  In  manufacturing  industry  also,  the  possibility 
of  one  country  obtaining  raw  material  at  a  less  cost  than 
another,  may  more  than  compensate  the  additional  expense 
which  may  be  thrown  upon  the  manufacturers  of  the  former 
country  by  the  payment  of  higher  wages.  With  regard  to 
America  and  Australia,  it  is  to  be  particularly  noted  that 
the  great  natural  resources  which  they  possess  must  confer 
upon  them  many  advantages  in  industrial  competition  of 
which  there  is  no  probability  that  they  can  be  deprived. 
Their  almost  inexhaustible  supplies  of  fertile  land  give  them 
advantages  such  as  are  possessed  by  scarcely  any  other 
country.  Their  mineral  resources  are  so  great  that  if  they 
suffer  from  foreign  competition,  it  must  be  through  their 
own  want  of  skill  and  enterprise.  Even  in  manufacturing 
industry,  where  it  is  supposed  that  protection  is  most 
needed,  it  must  be  remembered,  that  as  England  imports 
large  quantities  of  cotton  from  America,  and  of  wool  from 
Australia,  these  countries  must  with  regard  to  some  most 
important  branches  of  manufacturing  industry  enjoy  the 
advantage  of  cheaper  raw  material.  It  is,  moreover,  de- 
serving of  special  remark,  that  the  difference  in  wages  in 
countries  between  which  there  is  an  extensive  migration 
of  labor  must  constantly  diminish.  When  emigration  has 
continued  for  some  time,  the  objections  to  it  are  sure 
gradually  to  lessen;  it  becomes  much  more  of  a  national 


286  PROTECTION    AND    FREE   TRADE. 

habit,  and  the  prospect  of  a  comparatively  small  difference 
in  the  remuneration  of  labor  may  be  sufficient  to  induce 
people  to  leave  their  own  country,  if  they  think,  they  shall 
be  settling  amongst  friends  and  relations,  which  would 
prove  altogether  inadequate  if  they  had  to  seek  a  new  home 
amongst  strangers.  This  increasing  readiness  to  emigrate 
must  exert  an  equalizing  influence  on  wages,  and  must 
cause  the  difference  in  wages  in  the  two  countries,  between 
which  the  migration  takes  place,  steadily  to  diminish. 

1 2 .  Another  argument  against  free  trade  is  that  protection, 
having  been  once  established,  cannot  be  abolished  without 
causing  great  loss  both  to  employers  and  employed  in  those 
trades  which  have  been  protected. 

It  cannot,  I  think,  be  doubted  that  the  loss  which  might 
be  inflicted  upon  many  special  trade  interests  by  the  aboli- 
tion of  protection  constitutes  by  far  the  most  serious  obstacle 
in  the  way  of  general  adoption  of  free  trade.  Exaggerated 
estimates  are  no  doubt  formed  of  the  loss  which  would  be 
actually  caused;  but  however  great  may  be  the  stimulus 
which  free  trade  would  give  to  the  prosperity  of  such  a 
country  as  the  United  States,  it  would  in  my  opinion  be 
impossible  suddenly  to  abolish  protection  without  causing 
considerable  loss  to  the  employers  and  employed  in  many 
trades  which,  through  its  aid,  had  been  fostered  into  a  kind 
of  unnatural  existence.  No  industrial  change,  however 
beneficial,  has  ever  been  introduced  without  causing  some 
loss  and  inconvenience  to  certain  special  classes.  The 
mechanical  inventions  which  have  done  most  to  enrich 
mankind  were  not  brought  into  general  use  without  causing 
great  loss  and  suffering  to  many  whose  labor  they  sup- 
planted. Seldom  has  a  class  endured  more  severe  hardships 
than  were  borne  by  our  handloom  weavers  during  the  years 
that  they  carried  on  a  prolonged  and  hopeless  struggle, 
striving  in  vain  to  compete  with  products  which  were  made 
by  machinery  at  a  far  cheaper  rate.  Even  stage-coaches 


PROTECTION  AND  FREE  TRADE.          287 

could  not  be  superseded  by  railways  without  some  indi- 
viduals being  injured  by  the  change.  Although  the  aggre- 
gate wealth  of  the  country  was  enormously  increased,  yet 
in  certain  special  cases  property  which  was  before  of  great 
value  became  almost  worthless.  Along  the  roads  which 
used  to  be  our  great  thoroughfares  are  still  to  be  found  the 
remains  of  large  inns  and  posting-houses  which  formerly 
let  for  many  hundreds  a  year;  but  immediately  the  railways 
drew  away  the  traffic  these  inns  so  entirely  lost  their  custom 
that  they  had  scarcely  any  value  at  all;  many  of  them  were 
pulled  down,  and  others  were  converted  into  cottages.  Any 
attempt  to  oppose  the  use  of  a  mechanical  invention  because 
of  the  loss  which  it  may  cause  to  certain  individuals  meets 
with  almost  universal  disapprobation.  Nothing,  it  is  main- 
tained, can  be  more  unreasonable  than  to  allow  the  tem- 
porary interests  of  a  few  to  stand  in  the  way  of  the  permanent 
advantage  of  the  entire  nation.  If  this  principle  holds  good 
with  regard  to  the  benefits  conferred  upon  a  nation  by  the 
introduction  of  a  mechanical  invention,  it  holds  equally  true 
with  regard  to  the  still  greater  benefits  which  a  nation  will 
derive  from  the  adoption  of  an  unrestricted  commercial  policy. 

13.  Protection  can  be  advantageously  introduced  into  a 
young  country  as  a  temporary  expedient,  since  various  indus- 
tries which  will  ultimately  prosper  without  protection  require 
its  aid  in  the  early  stages  of  their  existence. 

This  argument  in  favor  of  protection,  which  has  been 
reserved  to  the  last  for  consideration,  is  deserving  of  special 
attention,  not  only  because  of  the  great  weight  which  is 
attributed  to  it  by  the  advocates  of  protection  in  the 
Colonies  and  in  the  United  States,  but  also  because  it  has 
Obtained  a  great  amount  of  importance  from  the  support 
it  received  from  the  late  Mr.  J.  S.  Mill.  In  a  passage 
which  protectionists  at  the  present  day  so  repeatedly  quote 
that  they  seem  almost  to  regard  it  as  the  charter  of  their 
policy^  Jfc  Mill  says: 


PROTECTION    AND    FREE   TRADE. 


"The  only  case  in  which,  on  mere  principles  of  political 
economy,  protecting  duties  can  be  defensible,  is  when  they 
are  imposed  temporarily  (especially  in  a  young  and  rising 
nation)  in  hopes  of  naturalizing  a  foreign  industry,  in  itself 
perfectly  suitable  to  the  circumstances  of  the  country.  The 
superiority  of  one  country  over  another  in  a  branch  of 
production  often  only  arises  from  having  begun  it  sooner. 
There  may  be  no  inherent  advantage  on  one  part,  or  dis- 
advantage on  the  other,  but  only  a  present  superiority  of 
acquired  skill  and  experience.  A  country  which  has  this 
skill  and  experience  yet  to  acquire  may  in  other  respects 
be  better  adapted  to  the  production  than  those  which  were' 
earlier  in  the  field:  and  besides,  it  is  a  remark  of  Mr.  Rae, 
that  nothing  has  a  greater  tendency  to  promote  improve- 
ments in  any  branch  of  production  than  its  trial  under 
a  new  set  of  conditions.  But  it  cannot  be  expected  that 
individuals  should  at  their  own  risk,  or  rather  to  their 
certain  loss,  introduce  a  new  manufacture,  and  bear  the 
burden  of  carrying  it  on  until  the  producers  have  been 
educated  up  to  the  level  of  those  with  whom  the  processes 
are  traditional.  A  protecting  duty,  continued  for  a  reason- 
able  time,  will  sometimes  be  the  least  inconvenient  mode 
in  which  the  nation  can  tax  itself  for  the  support  of  such 
an  experiment.  But  the  protectionism  should  be  confined 
to  cases  in  which  there  is  good  ground  of  assurance  that  the 
industry  which  it  fosters  will  after  a  time  be  able  to  dispense 
with  it;  nor  should  the  domestic  producers  ever  be  allowed 
to  expect  that  it  will  be  continued  to  them  beyond  the 
time  necessary  for  a  fair  trial  of  what  they  are  capable  of 
accomplishing."  * 

There  is  no  one  more  ready  than  I  am  to  recognize  the 
high  authority  of  Mr.  Mill  as  an  economist,  and  I  will  at 
once  admit  that  the  arguments  which  he  advances  in  favor 
of  the  imposition  of  protection  in  a  young  country  would 

*See  Principles  of  Political  Economy,  by  J.  S.  Mill,  fifth  edition,  vol.  ii,  p.  525. 


PROTECTION    AND    FREE   TRADE.  289 

be  conclusive  if  there  were  a  reasonable  probability  that 
the  conditions  under  which  he  supposes  that  such  a  pro- 
tective duty  could  be  imposed  would  ever  be  realized.  It 
will  be  observed  in  the  passage  above  quoted  that  he  is 
most  careful  to  explain  that  protection  can  only  be  justified 
as  a  temporary  expedient ;  and  every  word  which  he  says 
in  support  of  protection  rests  on  the  supposition,  that  when 
an  industry  has  been  fairly  established  the  protective  duty 
will  be  at  once  voluntarily  surrendered  by  those  who  are 
interested  in  the  particular  industry.  It  is,  however,  incon- 
testably  shown  by  what  has  happened  in  the  United  States 
and  other  countries  where  protection  has  been  long  estab- 
lished, that  it  is  absolutely  impossible  to  impose  a  protective 
duty  under  the  stipulations  on  which  Mr.  Mill  so  emphatic- 
ally insists.  Whatever  professions  may  be  made  by  those 
who  first  ask  for  protection  that  it  is  only  required  for  a 
limited  period,  and  that  it  is  only  needed  to  enable  an  indus- 
try to  tide  over  the  obstacles  which  may  beset  its  first 
establishment,  it  is  invariably  found  that  when  an  industry 
has  once  been  called  into  existence  through  protection,  those 
who  are  interested  in  it,  whether  as  employers  or  employed, 
instead  of  showing  any  willingness  as  time  goes  on  to  sur- 
render protection,  cling  to  the  security  and  aid  which  they 
suppose  it  gives  their  trade  with  ever-increasing  tenacity. 
This  is  shown  in  a  very  striking  manner  by  the  experience 
of  nearly  a  hundred  years  of  protection  in  the  United  States. 
In  no  single  instance  has  a  protective  duty,  when  once 
imposed  in  that  country,  been  voluntarily  relinquished.  Far 
from  any  tendency  being  shown  by  those  who  are  connected 
with  the  industries  which  enjoy  protection  to  face  free 
competition,  they  constantly  display  a  feeling  of  greater 
dependence,  and  demand  with  reiterated  urgency,  additional 
safeguards  against  their  foreign  rivals.  A  well-known 
American  economist,  Professor  Sumner,  has  said  :  <*  Instead 
of  strong,  independent  industries,  we  have  to-day  only  a 
13 


290         PROTECTION  AND  FREE  TRADE. 

hungry  and  clamorous  crowd  of  l infants/"  Again,  Mr. 
Wells,  with  equal  force,  has  remarked:  " Although  the 
main  argument  advanced  in  the  United  States  in  support  of 
protective  duties  is  that  their  enactment  is  intended  to 
subserve  a  temporary  purpose,  in  order  to  allow  infant 
industries  to  gain  a  foothold  and  a  development  against 
foreign  competition,  there  has  never  been  an  instance  in  the 
history  of  the  country  where  the  representatives  of  such 
industries,  who  have  enjoyed  protection  for  a  long  series  of 
years,  have  been  willing  to  submit  to  a  reduction  of  the 
tariff,  or  have  voluntarily  proposed  it.  But,  on  the  contrary, 
their  demands  for  still  higher  and  higher  duties  are  insa- 
tiable and  never  intermitted."* 

No  amount  of  theoretical  reasoning  as  to  the  desirability 
of  imposing  a  protective  duty  as  a  temporary  expedient  in 
a  young  country,  can  outweigh  the  warnings  derived  from 
experience  that  no  security  can  be  provided  against  the 
permanent  continuance  of  a  protective  duty  when  it  has 
been  once  imposed.  If,  after  protection  has  been  in  opera- 
tion for  nearly  a  hundred  years  in  the  United  States,  the 
various  protected  interests  display  a  growing  determination 
to  resist  any  change  in  the  direction  of  free  trade,  what 
reason  is  there  to  suppose  that  what  has  happened  in 
America  will  not  in  future  years  occur  in  Australia  and 
other  countries,  if  they  should  carry  out  the  policy  which 
now  seems  to  find  favor  with  them,  of  calling  into  exist- 
ence various  branches  of  industry  by  the  imposition  of 
protective  duties  ? 

*  "Cobden  Club  Essays,"  second  series,  1871,  p.  529. 


CHAPTER  XVI. 

PROTECTION  AND  ITS  USES. 

BY  PROFESSOR  W.  D.  WILSON,  * 
Cornell  University. 


WHAT    MAKES    A    TARIFF    PROTECTIVE. 

A  TARIFF,  to  be  protective  to  any  particular  form  of 
industry,  must,  of  course,  always  be  equal  to  the 
difference  between  the  rate  at  which  the  commodity  can  be 
produced  in  the  country  of  its  production,  and  that  at  which 
it  can  be  produced  in  the  country  of  its  consumption.  Thus, 
if  cotton  cloth  can  be  produced  in  England,  and  sold,  after 
cost  of  transportation  here,  for  ten  cents  per  yard,  and  it 
cannot  be  produced  here  for  less  than  twelve,  two  cents  per 
yard  would  be  a  protective  tariff,  and  anything  below  that 
could  not  operate  as  protection  ;  above  that,  it  would  be, 
virtually,  prohibition. 

EFFECT    OF    A    TARIFF    THAT    IS    BELOW    PROTECTION. 

A  tariff  that  falls  below  the  point  at  which  it  is  protective, 
cannot  fail  to  increase  the  price  of  the  article  to  the  con- 
sumer ;  for  it  would  raise  the  price  of  the  article  by  the 
amount  of  the  tariff,  without  creating  any  competition 
among  domestic  producers,  so  as  to  reduce  the  price,  by 
means  of  their  competition,  one  with  another. 

*" First  Principles  of  Political  Economy  with  reference  to  Statesmanship  and 
the  Progress  of  Civilization."    Phila.,  H.  C.  Baird. 

(291) 


292  PROTECTION    AND    ITS   USES. 

Or  again,  a  tariff  upon  articles,  that  for  any  reason  a 
nation  cannot  produce,  as  for  example,  cotton  in  England, 
would  only  enhance  the  price  to  the  extent  of  the  tariff,  and 
for  the  same  reason,  as  a  " revenue  tariff,"  as  it  is  sometimes 
called,  would  raise  prices  there  permanently.  There  are,  or 
can  be  no  domestic  producers  to  reduce  it  by  competition, 
(1)  among  themselves,  or  (2)  with  foreign  producers. 

A  tariff  then,  upon  articles  which  we  cannot  produce,  or 
a  tariff  that  fails  to  be  protective  upon  what  we  can  produce, 
but  does  not,  only  increases  the  price  of  the  article  to  the 
consumer. 

And  even  a  tariff  for  protection,  if  it  be  needed  at  all  for 
that  purpose,  will  raise  the  price  of  the  imported  article  for 
the  time  being.  But  if  it  be  an  article  which  the  laborers 
of  that  country  can  produce  to  advantage,  the  tariff  will 
have  the  effect  of  creating  an  increased  demand  for  labor, 
and  thus,  by  raising  the  price  of  labor  in  all  branches  of 
industry,  it  will  enable  the  people  of  the  country  generally 
to  buy  the  article  more  easily  than  before,  even  at  the 
advanced  price. 

LIMITS    WITHIN    WHICH   PROTECTION    IS    POSSIBLE. 

And  here,  I  think,  we  have  a  hint  at  the  limits  within 
which  protection  by  way  of  tariff  "can  be  good  statesmanship 
for  any  country.  Protection  for  its  own  sake,  and  with  a 
mere  vague  notion  of  doing  good  somehow,  is  but  an  idle 
fancy  of  a  not  very  clear  brain. 

A  protective  tariff  on  what  cannot  be  produced  is  almost 
a  contradiction  in  terms.  But  a  tariff  with  a  view  to  pro- 
tect what  can  be  produced  only  at  great  disadvantage,  will 
be  an  unnecessary  tax  upon  the  industry  of  the  surrounding 
country  ;  for  the  reason  that  it  takes  so  much  more  labor  to 
produce  the  article  in  the  one  country  than  in  the  other. 

But  the  test  is  the  amount  of  labor — not  the  wages,  or  the 
cost  of  the  labor. 


PROTECTION   AND   ITS   USES.  293 

Thus,  for  example,  I  suppose  we  might  in  this  country 
construct  square  miles  of  hot-houses,  and  raise  all  the  coffee 
we  have  occasion  to  use.  But  it  would  be  a  very  costly 
process.  It  would  require  a  very  high  tariff  to  protect  that 
kind  of  industry.  And  it  would  be  very  bad  policy  ;  for 
although  it  would  diversify  industry  and  raise  the  wages  of 
the  laborer,  it  would  nevertheless  be  an  unremunerative  tax 
upon  the  industry  of  the  country.  It  would  be,  to  a  large 
extent,  money  thrown  away.  It  would  take,  perhaps,  ten 
times  as  much  labor  to  build  hot-houses  and  raise  the  coffee 
as  it  would  to  earn  the  money  and  pay  for  the  article  at  the 
price  at  which  it  could  be  imported,  and  hence,  if  I  am  right 
in  estimating  the  proportion,  about  nine -tenths  of  the  labor 
of  raising  the  coffee  at  home  would  be  a  total  loss  to  the 
world  ;  the  men  who  were  engaged  in  performing  the  work 
might  as  well  have  been  idle  nine-tenths  of  the  time,  or  nine 
out  of  ten  of  them  idle  all  the  time,  as  to  have  engaged  in 
making  the  preparations  for  raising  coffee  under  such  great 
disadvantages  of  natural  position. 

LIST'S    DOCTRINE. 

Mr.  List,  in  his  work  on  National  Political  Economy,  has 
shown,  as  it  seems  to  me,  that  there  are  three  stages  in  a 
nation's  history,  in  reference  to  the  policy  of  protection.  In 
the  first  stage,  when  the  people  are  but  few,  capital  scarce, 
and  land  plenty,  protection  cannot  effect  any  good  result.  A 
tariff  merely  taxes  the  people  to  no  purpose.  But,  as  soon 
as  the  people  become  more  numerous,  and  capital  has  begun 
to  accumulate,  they  will  need  to  diversify  their  industry,  by 
the  introduction  of  manufactures,  and  for  this,  most  likely, 
some  well  adjusted  scheme  of  protective  duties  will  be  nec- 
essary. This  constitutes  the  second  stage.  The  third  occurs, 
when  the  nation  has  become  so  rich,  so  densely  populated, 
that  there  remains  no  new  form  of  industry  to  be  domesti- 
cated, and  no  fear  of  evil  from  competition  with  other 


294  PROTECTION   AND   ITS   USES. 

nations.  In  this  stage,  a  protective  tariff  will  be  a  mere 
dead  letter.  There  will  be  but  little  importation  of  what 
the  nation  can  produce,  and  there  can  be  no  importation 
that  will  lower  the  price  of  commodities,  whether  we  regard 
those  imported,  or  those  of  domestic  production.  In  the 
first  stage,  therefore,  protection  is  unavailing,  and  a  damage. 
In  the  second,  it  is  effective  and  beneficial.  But  in  the 
third,  it  is  unavailing  and  useless,  a  mere  dead  letter  on  the 
statute  books. 

The  fact,  however,  that  a  protective  tariff  raises  the  money 
price  of  the  protected  article  at  first,  and  for  a  time  is  only  a 
prima  facie  objection  to  such  a  tariff,  at  most. 

PROTECTION    AND    NATIONAL    INDEPENDENCE. 

The  general  reasons  for  protection  may  be  arranged  under 
three  heads. 

1.  No  nation  can  be  independent  of  another  that  does 
not  produce  all  that  it  needs  for  consumption.     Give  any 
nation,  however  small,  the  exclusive  power  to  manufacture 
gun -powder,  and  you  will  make  that  nation  the  mistress  of 
the  world.     The  same  is  true,  though  to  ra  less  extent,  of 
every  other  article,  that  is,  as  is  felt  to  be  a  necessity  of  life. 

It  is  sometimes  said  that  this  would  be  a  means  of  keep- 
ing nations  at  peace.  And  doubtless  so  it  would,  to  some 
extent.  It  would  not,  however,  be  the  peace  of  equality 
and  right;  but  the  peace  rather  that  comes  from  the  uncom- 
plaining, unresisting  submission  of  the  weaker  to  the 
stronger. 

DIVERSIFICATION    OF    INDUSTRY. 

2.  The  second  fact  is,  that  no  community  can  be  thrifty 
without  a  diversification  of   labor;  and,   as  a  general  rule, 
the   greater   the   diversification   of    labor,  the   greater   the 
number  of  productive  employments,  the  more  nearly  do  we 
reach  the  condition  of  the  greatest  thrift,  namely,  the  great- 
est industry  of  the  greatest  number. 

Thus,  if  all  the  people  of   a  country  are  agriculturists, 


PROTECTION   AND    ITS   USES.  295 

agricultural  labor  and  agricultural  products  will  be  very 
cheap  in  their  money  value,  and  all  other  things  will  be  very 
dear  in  their  labor  value,  however  cheap  in  their  money 
value.  Hence  the  laborers  will  be  able  to  buy  but  little, 
however  much  they  may  have  to  sell. 

If  then  a  nation  be  so  situated,  that  a  protective  tariff  is 
necessary  as  a  means  of  introducing  manufactures,  or  any 
new  form  of  productive  labor  which  it  is  desirable  to  have, 
there  can  be  no  doubt  of  the  wisdom  of  such  a  measure, 
provided,  the  new  form  of  industry  is  one  that  is  so  well 
adapted  tc  the  people  and  the  country,  that  when  once  in- 
troduced, it  can  be  carried  on  with  profit,  and  without  con- 
tinued protection. 

FREE    TRADE    REDUCES    THE    WAGES    OF   THE    LABORERS. 

3.  The  other  is  the  fact  that  free  trade  between  nations 
will  sooner  or  later  bring  the  price  of  labor — wages — to  the 
same  level  the  world  over,  and  that  level  will  be  the  lowest 
figure  to  which  tyranny  and  misgovernment  can  reduce  the 
laborers  anywhere. 

Equality  in  skill,  machinery,  and  other  facilities  for  man- 
ufacture, are  so  nearly  within  the  reach  of  all  nations,  that 
we  may  consider  them  equal  everywhere.  The  facilities  for 
transportation  are  so  great,  that  the  cost  of  transportation 
has  become  an  exceedingly  small  per  cent,  in  the  cost  of  all 
the  most  valuable  articles  we  produce. 

Hence  with  free  trade  we  bring  all  the  most  valuable 
articles  into  competition  in  the  one  great  commercial  center 
of  the  world.  The  producers  of  the  raw  materials,  wher- 
ever they  are,  must  bear  the  cost  of  transportation  thither, 
and  if  they  are  consumers  too,  they  must  bear  the  cost  of 
transportation  of  whatever  they  consume,  back  from  the 
place  of  manufacture  to  themselves.  And  he  who  can  hire 
labor  the  cheapest,  can  of  course,  other  things  being  equal, 
make  himself  the  commercial  centre  and  drive  all  other 
competitors  out  of  the  market,  and  thus  control  the  market 
of  the  world. 


CHAPTER    XVII. 

SPEECH  OP  HOK   GEORGE   McDUFFIB, 

OF    SOUTH    CAROLINA, 

In  the  Senate,  January  29,  1844 


E  senator  from  Maine  [Evans],  by  a  course  of  reason- 
I  ing  which,  if  it  can  be  comprehended  at  all,  is  cer- 
tainly not  inductive,  holds  the  reverse  of  all  these  doctrines. 
In  one  part  of  his  argument,  he  maintains  that  it  is  better 
to  pay  a  high  price  for  manufactures  made  at  home  than  a 
low  price  for  those  made  abroad,  though  these  latter  ai  e 
necessarily  obtained  in  exchange  for  productions  made  at 
home.  In  another  part,  he  maintains  the  yet  bolder  posi- 
tion, that  a  high  rate  of  duties  upon  imports  diminishes 
their  prices,  and  a  low  rate  enhances  them!  These  are 
certainly  most  admirable  illustrations  of  Lord  Bacon's 
method  of  investigating  the  great  truths  of  philosophy! 

I  propose  now,  sir,  to  analyze  the  arguments  by  which  the 
Senator  reaches  these  wonderful  results  in  political  economy. 
In  the  first  place,  he  says  that  when  we  impose  a  duty  upon 
foreign  imports, — of  cotton  manufactures  for  example — the 
effect  of  that  duty  is  to  reduce  the  price  of  the  foreign  man- 
ufacture abroad,  thus  throwing  back  the  burdens  of  our 
taxation  upon  the  people  of  foreign  countries!  Indeed,  sir, 
if  this  theory  can  be  made  good  by  the  inductive  or  any 
other  process  of  reasoning,  it  will  be  one  of  the.  greatest 
discoveries  ever  made  by  any  financier,  ancient  or  modern. 

(296) 


THE   TARIFF — JVl'DUFFIE.  297 

What  a  comfortable  thing  it  would  be  to  make  other  nations 
supply  our  Treasury!  But  there  is  one  consideration  calcu- 
lated to  diminish  the  value  of  this  discovery,  which  I  would 
suggest  to  the  honorable  senator.  This,  unfortunately,  is  a 
game  at  which  two  can  play,  and  in  which  the  motto  of 
both  parties  would  be,  "the  hardest  fend  off."  And  we 
should  find,  in  the  end,  as  they  say  somewhere,  that  "the 
longest  pole  would  knock  down  the  persimmon." 

But  to  speak  gravely,  Mr.  President,  if  nations  really 
possessed  this  power  of  mutually  taxing  each  other,  it  would 
prove  to  be  the  greatest  curse  ever  inflicted  upon  mankind. 
It  would  totally  overthrow  that  system  of  responsibility  so 
wisely  ordained  by  a  wise  Providence  for  preserving  the 
harmony  of  nations.  It  would  revive,  in  another  form,  the 
financial  system  of  barbarous  and  conquering  nations,  who 
supplied  their  exchequers  by  rapine  and  plunder;  and  nations 
would  sink  (like  the  Roman  empire)  under  the  weight  of 
their  own  corruptions.  But,  sir,  I  think  I  can  relieve  the 
Senate  from  all  apprehension  of  these  terrible  disasters,  by 
exposing  the  fallacy  of  this  new  theory  of  taxation.  And 
the  senator  from  Maine  has,  himself,  furnished  me  with  the 
means  of  doing  it.  For,  by  another  of  those  strange  coin- 
cidences for  which  his  speech  is  remarkable,  immediately 
after  stating  that  a  duty  imposed  upon  imported  cotton 
manufactures  would  reduce  the  price  in  England  and  throw 
the  burden  upon  the  foreign  producers,  he  held  up  a  com- 
pendium of  British  statistics,  showing  that  the  whole  amount 
of  cotton  manufactures  annually  made  in  that  kingdom  was, 
in  value,  $260,000,000  of  which  only  $10,000,000  are  ex- 
ported to  the  United  States,  while  the  remaining  $250,000,. 
000  are  consumed  in  Great  Britain  and  other  foreign 
countries.  Now,  is  it  not  apparent  that  the  price  of  cotton 
manufactures  in  Great  Britain  is  regulated  and  fixed  by  the 
aggregate  demand  of  the  whole  world,  including  the  home 
demand,  and  that  the  miserable  bagatelle  of  $10,000,000, 
13* 


298  THE  TARIFF — M'DUFFIE. 

exported  to  this  country,  could  not  reduce  their  price  in  that 
country  more  than  one  or  two  per  cent,  if  it  were  entirely 
cut  off  ?  Sir,  there  never  was  a  more  baseless  vision  than 
this  theory  of  the  Senator  from  Maine;  and  I  thank  God 
that  nations  do  not  possess  this  power  of  mutual  taxation. 
If  they  did,  it  would  speedily  end  in  the  utter  destruction 
of  all  foreign  commerce,  and  a  fearful  retrograde  in  the 
march  of  civilization.  It  being  obvious,  then,  that  the 
burden  of  taxes  imposed  by  this  government  must  fall  upon 
our  own  people,  let  us  trace  the  operation  of  an  import  duty 
through  its  several  transitions,  and  see  where  it  ultimately 
rests.  It  is  paid,  in  the  first  instance,  by  the  importing 
merchant;  but,  as  he  is  free  to  import  or  not,  as  his  interest 
dictates,  he  would  instantly  cease  to  import  if  he  could  not 
indemnify  himself  for  the  duty  he  pays  by  a  corresponding 
increase  in  the  price  of  the  articles  on  which  it  is  paid. 
After  resting  upon  him  for  a  time,  the  duty  advanced  with 
its  accumulated  interest,  are  transferred  to  the  retail  mer- 
chant, who  in  like  manner  transfers  them  to  the  consumer, 
or  domestic  purchaser,  where  they  finally  rest.  Now,  sir,  I 
care  not  whether  you  consider  the  consumer  or  the  domestic 
producer  as  bearing  the  burden  of  protective  duties.  In 
either  case,  the  result  is  substantially  the  same.  The  class 
of  imports  upon  which  these  duties  are  imposed,  are  exclu- 
sively paid  for  by  the  productions  of  the  exporting  States, 
and  must,  therefore,  be  regarded  as  the  annual  income  of 
those  States.  And  although  they  do  not  consume  the  whole 
of  these  precise  imports,  they  consume  an  aggregate  amount 
of  imports  and  protected  manufactures  equally  enhanced  in 
price  by  the  import  duties,  considerably  larger  than  the 
.whole  amount  of  these  imports.  For  besides  our  exports, 
we  sell  to  the  manufacturers  cotton  to  the  annual  amount 
of  eight  or  ten  millions  of  dollars,  for  which  they  pay  us 
almost  exclusively  in  protected  manufactures. 

But  the  Senator  asks,  with  apparent  anxiety,  if  you  add 


THE   TARIFF — M^DUFFIE.  299 

$40,000,000  to  the  annual  amount  of  the  imports  obtained 
for  your  exports,  where  are  you  to  find  consumers?  Now, 
let  me  tell  him  that  he  need  give  himself  no  concern  on  this 
subject.  There  never  was  a  people  who  had  the  means  of 
paying  for  any  amount  of  imports,  however  large  —  consist- 
ing of  every  variety  of  commodities  which  administer  to  the 
wants  and  comforts  of  all  classes  —  who  could  not  find  a 
way  to  consume  them.  The  people  of  the  exporting  States 
£  e  the  natural  consumers  of  the  whole  of  those  manu- 
factures received  in  exchange  for  their  exports,  precisely 
for  a  reason  so  often  alluded  to  by  the  Senator;  and  that  is, 
that  they  have  the  means  of  paying  for  them.  How  often 
has  he  said,  "give  the  people  the  means  of  consuming  for- 
eign imports  "  —  admitting  that  the  power  of  consumption 
was  limited  only  by  the  means.  Now,  sir,  the  people  of  the 
exporting  States,  while  they  disdain  to  ask  this  government 
to  give  them  the  means  of  consuming  foreign  imports,  or 
anything  else,  have  a  right  to  demand,  and  they  do  demand, 
that  you  permit  them  to  enjoy  the  fruits  of  their  own  honest 
industry,  and  release  them  from  that  infamous  system  of 
legislative  plunder,  by  which,  their  means  of  consumption 
are  unrighteously  taken  from  them,  and  transferred  to  the 
people  of  more  favored  regions.  And  I  tell  the  Senator 
from  Maine  that  they  can  not  only  consume  the  whole  of 
those  imports  which  are  purchased  by  the  productions  of 
their  industry,  but  that  they  can  do  so  with  the  proud  con- 
sciousness that  what  they  consume  is  emphatically  their  own, 
derived  from  no  unjust  and  iniquitous  monopoly,  but  from 
the  blessing  of  God  upon  their  own  lawful  industry. 

If  the  great  staples  of  the  South  and  West  were  equally 
diffused  over  the  North  and  East,  and  the  manufactures  of 
the  latter,  in  like  manner,  diffused  over  the  former,  do  you 
suppose  this  system  would  stand  for  a  single  year?  I  do 
not  believe  it  would  command  ten  votes  in  this  body.  Or, 


300  THE   TARIFF — M'DUFFIE. 

consider  this  whole  country,  with  its  now  conflicting  inter- 
ests, as  an  estate  belonging  to  a  single  proprietor.  Would 
these  interests  stand  in  conflict  any  longer?  Would  such  a 
proprietor  have  the  consummate  folly  to  cut  off  the  imports 
of  foreign  manufactures  from  one  "branch  of  his  estate,  that 
he  might  supply  their  place,  at  an  increased  cost  of  forty 
per  cent.,  by  another  branch?  Sir,  it  is  vain  to  disguise  the 
fact  that  it  is  because  the  interests  of  the  United  States  are 
not  homogeneous,  that  this  protective  system  has  grown  up 
to  its  present  gigantic  stature.  .If  the  interests  of  the 
people,  like  the  government,  were  a  unit,  and  the  question 
was,  how  to  produce  the  greatest  aggregate  income  for  the 
whole,  not  a  man  could  be  found  so  absurd  as  to  propose 
the  exclusion  of  foreign  manufactures  because  they  are 
cheap,  and  substitute  domestic  manufactures  at  higher 
prices,  as  a  means  of  increasing  the  national  income. 

But,  Mr.  President,  to  bring  all  these  views  to  a  practical 
test,  and  to  demonstrate  the  gross  and  revolting  inequality 
and  injustice  of  this  protective  system,  I  will  suppose  that 
the  Union  were  now  peaceably  dissolved,  and  that  three 
separate  confederacies  were  formed — one  consisting  of  the 
Middle  and  Eastern  States,  another  of  the  Western  and 
Northwestern  States,  and  the  third  of  the  Southern  and 
Southwestern  States — denominated  respectively  the  manu- 
facturing, the  farming,  and  the  planting  confederacies. 
Each  of  these  would,  of  course,  be  remitted  to  its  original 
and  inherent  right  of  self-government,  and  divested  of  all 
power  to  control  or  influence  the  legislation  of  the  others. 
Now,  I  propose  to  inquire  what  would  be  the  obvious  policy 
of  each  of  these  confederacies  on  the  great  questions  of  free- 
trade  and  protection,  and  how  the  interests  of  each,  con- 
sidering the  subject  merely  with  a  view  to  national  wealth, 
would  be  affected  by  the  political  change  I  have  supposed. 
And  I  will  first  draw  a  faithful  picture  of  the  condition  of 
the  southern  and  southwestern  confederacy  under  the  new 


THE    TARIFF — M?DUFFIE.  301 

order  of  things  and  hold  it  up  to  the  view  of  the  Senate  in 
contrast  with  its  present  condition,  and  ask  the  advocates  of 
the  protective  policy  to  "look  at  this  picture,  and  look  at 
that,"  and  say  whether  it  is  not  "  Hyperion  to  a  Satyr." 

Judging  from  our  past  experience,  it  would  be  within 
limits  to  assume  that  the  exports  of  the  planting  confederacy 
would  amount  annually  to  at  least  a  hundred  millions  of 
dollars  under  that  system  of  free-trade  which  would,  of 
course,  be  adopted;  and  in  return  for  this  there  would  be  an 
annual  amount  of  imports  equal  to  one  hundred  and  twenty 
millions  of  dollars ;  for  we  should  sell  as  much  and  buy  as 
much  as  possible,  having  no  dread  of  a  balance  of  trade  in 
our  favor;  in  other  words,  of  receiving  more  value  than  we 
gave.  A  duty  of  ten  per  cent,  on  these  imports  would  yield 
an  annual  revenue  of  $12,000,000 — a  most  abundant  supply, 
for  all  the  imaginable  wants  of  the  government;  which 
would  not  only  be  raised  with  one -fourth  part  of  the  burden 
now  imposed  upon  our  people,  but  the  whole  of  it  would  be 
expended  among  them;  whereas,  of  the  enormous  contribu- 
tions now  drawn  from  the  productions  of  our  industry, 
scarcely  anything  is  returned  to  us  in  the  shape  of  disburse- 
ments. Now,  sir,  I  have  made  a  statement,  with  all  the 
truth  and  unadorned  simplicity  of  history,  of  what  every 
man  must  know  would  be  the  policy  pursued  by  the  Southern 
and  Southwestern  States  under  a  separate  government,  and 
of  the  results  of  that  policy  as  it  would  affect  their  wealth 
and  prosperity  o  And  yet,  sir,  that  statement,  in  which  1 
defy  any  senator  to  point  out  the  slightest  coloring  or 
exaggeration,  discloses  to  every  mind,  capable  of  compre- 
hending it,  the  elements  and  causes  of  one  of  the  most 
extraordinary  revolutions  in  the  prosperity  of  States  to  be 
found  in  the  history  of  the  world,  whether  proceeding  from 
change  of  government,  commercial  discoveries,  or  any  other 
cause.  Sir,  no  imagination  can  adequately  portray  the 
increased  prosperity  of  the  Statesin^  question,  in  all  its 


302  THE   TARIFF — Jtt'bUFFIE. 

developments.  Their  annual  income — the  annual  amount  of 
consumable  commodities  which  they  would  receive  as  the 
reward  of  their  industry,  to  be  distributed  among  all  classes, 
would  be  increased  from  $72,000,000  to  $108,000,000,  or  in 
that  proportion — to  say  nothing  of  the  employment  and 
means  of  enjoyment  which  would  result  from  the  disburse- 
ment of  the  revenue.  The  cities  of  Charleston,  Savannah, 
and  New  Orleans,  in  some  of  which  it  may  be  said  that  the 
grass  now  grows  in  the  streets,  would  rise  from  their  ruins 
as  if  by  enchantment,  and  rival  the  best  days  of  New  York 
and  Philadelphia.  And  more  than  all,  sir,  the  spirit  of  the 
people,  broken  down  by  the  steady  and  progressive  decay  of 
their  fortunes,  would  rise  with  renovated  energy  amidst  the 
animating  spectacle  of  a  general  and  progressive  prosperity, 
But  the  crowning  glory  of  this  great  change  would  be,  that 
it  was  produced  without  the  possible  imputation  of  injustice 
inflicted  upon  others,  and  simply  from  being  restored  to  our 
natural  right  to  enjoy  the  fruits  of  our  own  industry. 

Let  us  now  trace  the  operation  of  this  political  change 
upon  the  prosperity  of  the  manufacturing  confederacy  of 
the  Middle  and  Eastern  States.  The  manufacturers  now 
receive  an  annual  bounty  of  about  $50,000,000  from  the 
combined  system  of  revenue  and  protective  duties,  laid 
mainly  upon  that  branch  of  imports  which  would  now  belong 
to  a  separate  and  independent  confederacy.  Of  this  they 
would  of  course  be  deprived.  The  whole  protective  system 
would  be  at  an  end.  Their  new  government  would  have  no 
means  to  protect  them,  and  they  would  need  no  protection. 
For  how  unnecessary  and  absurd  would  it  be  to  impose  high 
duties  upon  foreign  manufactures  where  there  would  be 
nothing  in  the  country  with  which  to  pay  for  them.  They 
would  not  come  in,  therefore,  if  you  would  open  your  ports 
and  proclaim  free-trade. 

The  difficulty  would  be  no  longer  in  excluding  foreign 
manufactures,  but  in  obtaining  a  market  for  their  own. 


THE  TARIFF— M'DUFFIE.  303 

And  where  would  they  find  that  market?  In  the  planting 
confederacy?  They  would  now  have  to  contend  against  the 
foreign  manufacturers  in  that  market,  not  only  without  a  pro- 
tection of  forty,  or  even  twenty  per  cent.,  but  without  any 
protection  at  all.  It  would  be  our  right  and  our  duty  to 
impose  the  same  revenue  duties  upon  their  manufactures  that 
we  should  impose  upon  those  of  other  countries;  thus  receiv- 
ing a  fair  revenue  of  ten  per  cent,  from  manufactures  on 
which  we  now  pay  a  bounty  of  forty.  And  where  would 
this  manufacturing  confederacy  find  sources  of  revenue? 
If  their  domestic  exports  may  be  fairly  assumed  as  the 
measure  of  their  imports,  these  would  hardly  reach  twenty 
millions.  And  a  duty  of  even  forty  per  cent,  would  yield  a 
very  inadequate  revenue,  if  compared  with  that  of  their 
southern  neighbor.  The  result  would  probably  be,  that  half 
their  revenue  would  have  to  be  raised  by  internal  taxes, 
repugnant  as  these  are  to  the  notions  of  the  Senator  from 
Maine;  and  they  would  probably  be  imposed  in  the  shape  of 
excise  duties  upon  those  very  manufactures  which  would  be 
deprived  of  the  protection  of  a  forty  per  cent,  duty,  which 
they  now  enjoy.  But,  sir,  I  have  not  yet  finished  the 
gloomy  portraiture  of  the  manufacturing  confederacy,  as  it 
would  be  under  the  new  order  of  things.  The  states  which 
would  compose  that  confederacy  now  receive  the  greater 
portion  (probably  nine-tenths)  of  the  enormous  disburse- 
ments of  this  wasteful  and  extravagant  government. 

This  is  no  small  matter,  sir,-  few  of  the  most  enlightened 
statesmen  and  political  economists  ever  realized  its  impor 
tance,  till  the  close  of  the  twenty  years7  war  which  grew  out 
of  the  French  Revolution.  During  that  war,  the  financial 
resources  of  Great  Britain  seemed  as  miraculous  as  the 
military  achievements  of  Napoleon.  With  an  annual  expen- 
diture  of  $500,000,000  for  several  years,  of  which  $300,- 
000,000  was  raised  by  taxation,  the  people  seemed  to  be,  and 
actually  were,  for  the  time,  eminently  prosperous.  But  at 


301  THE   TARIFF — M'DUFFIE. 

the  close  of  the  war,  when  these  vast  disbursements  com- 
paratively ceased,  general  depression  and  distress  followed, 
instead  of  increased  prosperity  anticipated.  The  extraordi- 
nary influence  of  government  disbursements  at  home,  in 
raising  the  prices  of  commodities  and  labor,  and  in  stimulat- 
ing industry,  was  then,  for  the  first  time,  fully  disclosed. 
And  it  was  the  opinion  of  able  writers  and  statesmen,  that, 
during  the  war,  the  disbursement  of  $500,000,000  annually 
in  Great  Britain,  derived  from  loans  and  taxes,  very  nearly 
indemnified  the  people  for  the  current  burden  of  taxation. 
But  this  was  neither  more  nor  less  than  the  people  of  the 
day  living  upon  the  resources  of  posterity — the  one  bloated 
with  artificial  prosperity,  the  other  doomed  to  perpetual  and 
oppressive  burdens.  And  now,  sir,  to  apply  this  example  to 
the  case  before  us,  how  perfectly  do  the  manufacturing  States 
now  represent  the  people  of  Great  Britain  during  the  war, 
and  the  exporting  States  their  prosperity?  Under  the 
political  change  1  have  supposed,  all  the  present  disburse- 
ments would,  of  course,  bo  withdrawn  from  the  States  which 
now  receive  them. 

1  have  thus,  sir,  presented  a  statement  of  the  results  which 
would  take  place  in  the  manufacturing  confederacy,  with  the 
same  sort  of  historical  fidelity  which  1  endeavored  to  observe 
in  the  statements  I  made  relative  to  the  planting  confederacy. 
J  have  stated  nothing  speculative;  but,  on  the  contrary, 
results  which  must  take  place.  And  I  now  leave  it  to  the 
manufacturers  themselves  to  decide  whether  this  plain  state- 
ment does  not  also  disclose  the  elements  and  causes  of  a  rev- 
olution in  their  prosperity  fully  equal  to,  but  in  dismal  con- 
trast  with,  that  which  I  have  shown  would  take  place  among 
the  planting  States.  How  often  have  they  told  us  that  the 
protection  derived  merely  from  a  revenue  tariff  would  be 
totally  inadequate  to  protect  them  from  total  ruin;  and  that 
we  had  as  well  apply  the  torch  to  their  manufactories  as  to 
reduce  the  duties  upon  imports  to  that  standard  ?  If  these 


THE    TARIFF M^DUFFIE.  305 

were  not  false  clamors  what  a  scene  of  desolation  would  be 
produced  by  depriving  them  of  all  protection,  and  leaving 
them,  like  the  producers  of  the  staples  of  exportation,  to 
seek  out  markets  abroad,  where  they  must  encounter  the 
equal-handed  competition  of  the  whole  world! 

Such,  Mr.  President,  would  be  the  opposite  and  striking 
results  produced  among  the  planting  and  the  manufacturing 
States  by  the  political  change  I  have  supposed;  while  the 
Western  arid  Northwestern  States  would  find  a  vastly 
extended  market  in  the  planting  States  for  all  the  productions 
of  their  farms,  obtaining  high  prices  and  cheap  manufactures 
instead  of  the  low  prices  they  now  obtain,  and  the  high  prices 
they  are  now  compelled  to  pay  to  sustain  the  monopolies  of 
the  protective  system.  Now,  sir,  I  earnestly  ask  the  ques- 
tion, What  is  it,  in  the  new  order  of  things  I  have  supposed, 
that  would  produce  such  extraordinary  and  opposite  effects 
in  the  planting  and  manufacturing  confederacies  ?  If,  after 
ten  years  from  the  establishment  of  these  separate  confeder- 
acies a  stranger  should  revisit  the  country,  who  had  seen  it 
before,  he  would  naturally  inquire  what  had  produced  the 
mighty  changes  that  would  everywhere  meet  his  eye.  In 
the  South  and  Southwest,  seeing  our  cities  thronged  with  a 
vastly  increased  and  prosperous  population;  the  silence  of 
our  streets  succeeded  by  the  animating  hum  of  active  indus- 
try, and  the  whole  country  covered  with  tasteful  and  well- 
furnished  mansions,  where  venerable  ruins  of  log  cabins  had 
stood  before, — he  would  exclaim,  "  What  god  has  descended 
to  bless  this  favored  region,  or  what  countries  have  been 
plundered  to  produce  these  monuments  of  wealth  and  pros- 
perity where  all  was  decay  and  poverty  before  ? "  He 
would  be  almost  incredulous  when  informed  that  all  this  had 
resulted  exclusively  from  the  restoration  of  these  States  to 
the  right  of  self-government,  and  their  citizens  to  their 
natural  rights.  The  same  stranger,  beholding  the  fallen  and 
ruinous  condition  of  the  manufacturing  States,  would  natur- 


306  THE   TARIFF M?DUFFIE. 

ally  ask,  "  What  monstrous  despotism,  what  oppressive  bur- 
dens  of  taxation  have  destroyed  the  prosperity  which,  ten 
years  ago,  distinguished  these  States  from  all  their  associates  ?  " 
He  would  probably  be  still  more  incredulous  when  informed 
"  that  all  the  changes  he  saw  had  been  produced  by  prevent- 
ing  those  States  from  taxing,  as  they  had  done  for  twenty 
years,  the  productive  industry  of  their  southern  and  western 
associates." 

Now,  Mr.  President,  if  I  have  not  grossly  exaggerated  the 
comparative  effects  which  would  be  produced  upon  the  man- 
ufacturing and  other  States  of  the  Union,  by  simply  restor- 
ing them  to  the  right  of  regulating  their  own  several  inter- 
ests, how  enormous  must  be  burdens  imposed  upon  the 
exporting  States  by  the  tributary  vassalage  to  which  they 
have  been  for  twenty  years  reduced  by  the  protective  policy  ? 
I  have  presented  this  plain  and  practical  view  of  the  subject, 
in  the  hope  of  making  palpable  to  the  view  of  our  oppressors 
themselves  the  injustice  they  are  perpetrating.  And  I  warn 
them  that  there  is  a  point  beyond  which  oppression  will 
not  be  endured,  even  by  the  vilest  slaves  or  the  most  loyal 
citizens. 


CHAPTER  XVIII. 

THE  TARIFF. 

BY  HON.  JUSTIN  S.  MORKILL  OF  VERMONT, 

In  the  Senate  of  the  United  States,  Dec.  8,  1881,  on  the  Bill  to 
establish  a  Tariff  Commission. 


MR.  PRESIDENT:  I  have  brought  this  subject  to  the 
early  attention  of  the  Senate  because  if  early  legis- 
lative action  on  the  tariff  is  to  be  had ,  obviously  the  measure 
proposed  by  Senator  Eaton  and  passed  at  the  last  session  of 
the  Senate  is  a  wise  and  indispensable  preliminary  which 
cannot  be  started  too  soon.  The  essential  information  needed 
concerns  important  interests,  vast  in  number  and  overspread- 
ing every  nook  and  corner  of  our  country;  and  when  made 
available  by  the  ingathering  and  collocation  of  all  the  related 
facts,  will  secure  the  earliest  attention  of  Congress,  as  well 
as  the  trust  and  confidence  of  the  country,  and  save  the 
appropriate  committees  of  both  Houses  weeks  and  months 
of  irksome  labors — possibly  save  them  also  from  some 
blunders  and  from  final  defeat. 

An  enlargement  of  the  free  list,  essential  reductions,  and 
readjustments  of  rates,  are  to  be  fully  considered,  and  some 
errors  of  conflicting  codifications  corrected. 

If  a  general  revision  of  the  Bible  seems  to  have  been 
called  for,  it  is  hardly  to  be  wondered  at  that  some  revision 
of  our  revenue  laws  should  be  invited.  But  changes  in  the 
frame-work  of  a  law  that  has  had  more  of  stability  than  any 
other  of  its  kind  in  our  history,  and  from  which  an  unexam- 

(307) 


308  THE   TARIFF — MORRILL. 

pled  growth  of  varied  industries  has  risen  up,  should  be 
made  with  much  circumspection,  after  deliberate  considera- 
tion, by  just  and  friendly  hands,  and  not  by  ill-informed  and 
reckless  revolutionists.  When  our  recent  great  army  was 
disbanded  war  taxes  were  also  largely  dismissed,  and  we 
have  now,  and  certainly  shall  have  hereafter,  no  unlimited 
margin  for  slashing  experiments. 

We  can  expect  no  further  examples  of  receipts  exceeding 
the  estimates  by  nearly  $100,000,000,  nor  expenditures  fall- 
ing short  $200,000,000.  Such  violent  waves,  coming  either 
to  fill  or  to  empty  the  Treasury,  are  no  longer  to  occur.  Our 
normal  condition,  modified  by  national  growth,  must  be 
resumed.  We  are  to  consider  how  much,  if  any,  of  internal 
revenue  can  be  relinquished,  and  next  where  and  how  the 
tariff  can  be  safely  and  wisely  revised,  so  as  to  leave  it  prop- 
erly productive,  and  in  harmony  with  all  interests,  preserv- 
ing the  proper  equilibrium  among  the  different  branches  of 
trade  and  just  to  every  section  of  the  country. 

The  amount  of  revenue  required  must  be  determined,  and 
the  requirement  for  ordinary  expenses,  for  interest  on  the 
public  debt,  and  for  pensions,  as  well  as  for  some  enlarge 
tnent  of  our  Lilliputian  Navy  and  the  decent  equipment  of 
our  military  fortifications,  is  still  so  great  that  extreme  pro- 
tection is  not  so  much  the  question  as  that  of  revenue;  and 
with  barely  moderate  discrimination  in  favor  of  American 
fields  and  work-shops,  not  leaving  them  in  danger  of  unfair 
foreign  competition,  little  more,  it  is  believed,  will  be  found 
necessary.  If,  however,  there  must  anywhere  be  rusty 
plows,  blown  out  furnaces,  idle  looms,  unemployed  men, 
and  ragged  tramps,  then  let  the  Old  World  retain  these 
wretched  evidences  of  hard  times  as  long  as  a  protective 
tariff  will  exclude  them  from  our  shores. 

I  have  some  remarks  to  make  upon  the  general  subject  of 
the  tariff,  and  prefer  not  to  postpone  them  until  the  subject 
will  necessarily  be  encumbered  with  details  in  their  nature 


THE   TARIFF — MORRILL.  309 

subordinate.  It  is  not  my  habit  to  discuss  the  tariff  upon 
every  question  before  the  Senate,  and  I  shall,  therefore, 
make  no  apology,  it  being  properly  before  us,  for  asking 
indulgence  to  give  it  some  consideration,  especially  now,  in 
the  early  and  comparatively  unappropriated  time  of  the 
Senate. 

In  speaking  to-day  I  cannot  avoid  the  use  of  language 
which  will  show  that  I  am  proud  of  our  country  and  of  its 
people,  of  its  public  spirit  and  industrial  energy;  but  I  do 
not  claim  to  be  singular.  All  hearts  here  are  wedded  to 
American  institutions,  and  these,  as  we  believe,  are  destined 
to  historic  immortality. 

I  shall  also  speak  of  Great  Britain;  not  with  any  hate,  but 
in  the  words  of  Holmes,  "  Our  little  motherland — God  bless 
her !  "  for  how  much  is  there  in  the  grandeur  of  her  life  of 
centuries,  her  literature  and  laws  that  challenges  unstinted 
admiration.  But  it  is  enough  that  her  ways  are  not  our 
ways;  enough  that  she  imposes  the  laws  upon  her  own  peo- 
ple; and  when  she  straddles  across  the  Atlantic  and  intru- 
sively seeks  to  impose  her  free-trade  shackles  upon  the 
United  States,  I  claim  the  right  to  protest  against  it  with  as 
much  of  plain  and  homely  emphasis  as  I  may  be  able  to  com- 
mand. Pardon  me  if  I  repel  with  some  warmth  the  idea 
that  America  is  ever  to  be  exhibited  as  one  of  the  fettered 
captives  of  a  far- fetched  and  ill-planted  "Cobden  Club." 
Not  that  I  do  not  appreciate  the  great  merits  of  Mr.  Cobden 
as  an  eminent  Englishman;  but  his  principles  of  free  trade 
are  no  more  entitled  to  American  homage  than  his  principles 
of  mona-rchy. 

No  suspicion  of  partisanship  can  adhere  to  me  if  I  do  not 
outrun  the  fulminations  against  free  trade  of  the  late  Demo- 
cratic candidate  for  the  Presidency;  and  I  am  confident  that 
a  "tariff  for  revenue  only"  does  not  excite  in  me  more 
intense  disgust  than  in  the  Democratic  vice-presidential  can- 
didate for  1876,  who  vigorously  supports  in  the  North 


810  THE   TARIFF — MORRILL. 

American  Review  the  measure  for  a  tariff  commission.  "All 
parties,"  said  General  Hancock,  "  agree  that  the  best  way  for 
us  to  raise  revenue  is  largely  by  the  tariff.  So  far  as  we  are 
concerned,  therefore,  all  talk  about  'free  trade'  is  a  folly." 
Now  that  is  quite  in  the  line  of  what  /propose  to  say. 

Governor  Hendricks,  while  treating  the  "  plate-glass  poli- 
tics "  of  Southern  Indiana  with  magnificent  disdain,  exhibits 
no  want  of  sense  at  least  when  he  writes  that  "  Congress 
cannot  look  to  revenue  only,  but  must  exercise  judgment  and 
discretion,  and  that  in  the  exercise  thereof  regard  must  be 
had  to  the  interest  and  welfare  of  each  particular  object  of 
taxation,  and  to  its  comparative  importance  in  the  country. 
The  rates  cannot  be  uniform.  A  horizontal  tariff  is  impos- 
sible." 

These  sentiments  are  not  those  of  men  in  their  dotage,  but 
of  live  men,  possibly  not  yet  wholly  retired  from  all  political 
service,  and  on  these  questions  they  must  be  enrolled  as 
acceptable  political  backers. 

In  considering  the  questions  before  us — questions,  in  the 
words  of  Dr.  Johnson,  where  "the  greatest  powers  of  the 
understanding  are  applied  to  the  greatest  number  of  facts  " — 
I  regret  that  my  ability  is  so  unequal  to  their  importance, 
and  while  I  hope  to  advance  my  opinions  with  that  modesty 
which  is  always  decent,  I  must  admit  that  they  are  opinions 
not  suddenly  formed,  but  such  as  are  based  on  principles 
which  have  come  down  to  us  from  our  fathers  undimmed  by 
lapse  of  time,  and  which  'appear  to  me  as  the  head-lights  of 
a  prosperous  country  now  having  but  one  heart  and  fifty 
million  proprietors. 

ALL   TAXATION   UNATTRACTIVE. 

Perhaps  there  is  no  subject  of  equal  importance  more  con- 
stantly before  legislators  than  the  various  and  complex  sys- 
tems of  taxation  upon  which  all  civilized  governments  depend 
for  enduring  support,  and  none  less  attractive  or  so  unlikely 


THE   TARIFF — MORRILL.  311 

to  be  patiently  and  laboriously  investigated  by  the  majority 
of  those  whose  duty  it  may  be  to  revise  this  joyless  class  of 
statutes.  The  subject  affords  play  neither  to  sudden  wit  nor 
to  loitering  imagination,  but  from  first  to  last  tires  every- 
body with  a  wilderness  of  statistics,  frigid  facts,  and  debata- 
ble problems. 

The  imposition  of  even  necessary  taxes  upon  those  through 
whose  favor  we  derive  all  our  legislative  authority  is  not 
fascinating  work,  and  to  some  it  appears  so  likely  to  obscure 
professed  love  for  the  people,  or  so  threatening  to  official 
longevity,  that  they  prefer  a  defensive  record  adverse  to  all 
taxation.  They  would  not  imperil  congressional  honors  by 
taxing  such  necessaries  of  life  as  tobacco  and  whisky,  and 
they  denounce  the  wrong  which  does  not  leave  them  both 
free  to  every  head  of  a  family,  and  to  all  who  may  declare 
their  intention  to  become  the  head  of  a  family.  These 
tender  friends  have  no  idea  of  subjecting  tender-footed 
constituents  to  any  burden  beyond  that  of  regular  and  eager 
support  at  the  polls,  and  they  lean  to  an  alliance  with  those 
who  maintain  the  good  time  coming,  when  the  word  not 
shall  be  expunged  in  the  next  revision  from  all  the  com- 
mandments; when  holidays  shall  be  equally  rewarded  with 
working  days  ;  when  mines  and  quarries  shall  spontaneously 
open  where  fortunes  can  be  had  without  digging ;  when 
paper  money,  hitched  to  undiscoverable  gold,  shall  be 
created  by  the  fiat  of  the  government,  and  be  distributed 
every  morning  like  manna  to  hungry  Hebrews  ;  when  not 
only  those  who  are  lazy  can  be  lazier  still,  but  when  all 
monopoly  and  ownership  of  property  shall  cease,  and  every 
one  have  or  be  the  donkey  he  covets. 

But  in  our  country  common  sense  and  common  schools 
and  the  common  people  are  more  than  a  match  for  any 
school  of  demagogues.  It  is  satisfactory  to  feel  that  we 
may  here  safely  appeal,  not  in  vain,  to  the  broad  interests  of 
a  broad  land,  to  the  knowledge  and  virtue  which  should 


312  THE   TARIFF — MORRTLL. 

guide  statesmen,  and  to  the  example  of  illustrious  men, 
whose  lasting  glory  it  will  ever  be  that  they  bound  together 
the  people  of  a  continent  with  a  coherence  that  is  fixed  and 
invincible. 

Not  to  have  confidence  in  Congress  would  *be  to  impeach 
our  own  institutions  as  well  as  to  adopt  the  sneers  and  doubts 
of  hereditary  enemies,  who  have  been  wont  to  include 
Americans  among  those  whom 

No  king  could  govern,  and  no  god  could  please. 

In  the  end,  therefore,  1  am  glad  to  believe,  we  shall  reach 
the  conclusions  of  a  great  people,  who,  looking  to  their 
enduring  honor,  as  well  as  to  their  present  and  prospective 
interests,  will  cling  to  such  salutary  measures  as  have  already 
contributed  so  greatly  to  our  growth  and  character,  rather 
than  to  borrowed  expedients,  rejected  abroad,  and  unnatural 
not  less  everywhere  in  the  New  World  than  to  our  own 
people. 

THE    UNITED    STATES    PAYS    ITS    PUBLIC    DEBTS. 

The  policy  among  ancient  nationalities  was  to  accumulate 
large  sums  in  reserve  for  conquest  or  defense.  Then,  when 
war  arose,  no  new  taxes  were  imposed,  but  money  was  paid 
out  so  plenteously  that  every  home  industry  was  animated 
and  made  more  profitable.  We  may  deplore  the  fact  that 
the  victors  often  plundered  and  even  enslaved  the  conquered; 
yet  the  financial  economy  which  provided  in  advance  for 
great  emergencies  must  be  commended,  and  it  presents  a 
striking  contrast  to  the  policy  of  leading  nations  in  modern 
times,  which  seems  to  be  to  create  colossal  national  debts,  to 
mortgage  future  revenues,  and  pledge  the  honor  of  posterity 
to  be  responsible  for  both  the  necessities  and  unbounded 
prodigalities  of  their  ancestors. 

Under  such  circumstances  even  the  ordinary  burdens, 
national  and  local,  cheerfully  borne  in  time  of  peace  and 
prosperity,  begin  to  chafe,  and  those  added  by  reason  of 


THE   TARIFF MORRILL.  313 

exceptional  necessities  are  often  looked  upon  with  little 
composure,  tod  even  desperate  resolutions  are  sometimes 
formed  to  summarily  shake  them  off.  The  honor  of  making 
perpetual  pecuniary  sacrifices  for  one's  country  is  nowhere 
too  eagerly  courted.  New  ways  to  pay  old  debts,  of  cunning 
shifts  for  their  avoidance,  are  often  welcomed  with  greater 
satisfaction,  and  it  is  sometimes  found  that  these  shameless 
expedients  secure  favor  even  among  those  who  in  private 
life  would  scorn  to  make  a  promise  that  could  be  left 
unredeemed. 

A  public  debt  increases  the  cost  of  living,  and  the  obliga- 
tion to  pay  often  loses  vitality  and  becomes  decrepit  with 
age.  The  early  gradual  extinguishment  of  our  public  debt 
therefore  appears  to  me  as  essential  to  the  preservation  of 
our  moral  character  as  to  our  thrift.  An  intelligent  people 
should  be  inspired  with  the  hope  of  ultimate  deliverance 
from  debt ;  and  while  for  such  great  objects  the  heaviest 
war  taxes  are  no  longer  expedient,  nor  required,  enough, 
must  remain  to  show  that  our  debt-paying  policy  is  deep- 
rooted  and  unalterable. 

Abundant  as  our  revenue  now  seems  to  be,  it  is  not  much 
more  than  equal  to  what  has  been  relinquished  since  the 
war.  In  1866  the  receipts  were  $558,032,620.06,  or  nearly 
double  that  of  Great  Britain  during  that  supreme  exigency 
which  terminated  at  Waterloo.  Other  nations  may  have 
reached  the  grinding  limits  of  taxation,  but  so  far  as  our 
country  is  concerned,  with  no  ambition  beyond  the  victories 
of  peace,  should  a  crisis  occur  calling  for  a  fighting  nation, 
we  have  unstrained  resources  to  put  two  million  or  more  of 
gallant  men  in  the  field,  with  no  fear  of  a  lack  of  support 
or  adequate  reward. 

While  extricating  ourselves  from  public  debt,  and  from 

all  its  inhering  perplexities,  as  rapidly  as  we  may,  we  are 

bound  to  make  the  burdens  to  be  borne  as  light  and  equal 

as  possible.     A  large  national  debt  is  not  only  a  bond  to 

14 


314  THE   TARIFF — MORRILL. 

keep  the  peace  at  any  price,  but  it  is  an  advertised  lack  of 
national  energy,  which  sometimes  encourages  bald  preten- 
sions, or  invites  aggressions  from  those  who  would  other- 
wise  be  likely  to  treat  us  with  their  "  most  distinguished 
consideration." 

We  intend  to  keep  the  peace,  but  cannot  consent  to  speak 
with  "bated  breath,"  nor  to  be  financially  handcuffed.  It 
was  the  inferiority  of  neighboring  and  debt-laden  states,  as 
much  as  their  German  cousinship,  which  invited  their 
recent  absorption  by  Prussia.  Nor  can  we  forget  that  the 
last  of  the  Napoleons  once  thought  the  United  States  ripe 
for  spoliation.  The  broken-down  credit  of  Turkey  keeps 
the  beaks  and  claws  of  all  Europe  uplifted  to  tear  her  prov- 
inces asunder.  France  has  seized  Tunis,  and  while  holding 
the  African  wolf  by  the  ears,  waits  to  avenge  Sedan  by  the 
recovery  of  Alsace  and  Lorraine.  England  with  hands  too 
full  to  indisputably  grip  all  she  now  claims,  covets  Egypt. 
Austria,  defeated  in  Italy,  would  be  mistress  of  the  lower 
Danube,  and  Russia  sullenly  awaits  the  inevitable  hour  for 
Constantinople.  The  United  States,  however,  seeks  neither 
colonial  satellites  nor  territorial  conquests.  Contented  with 
the  past,  we  await  without  fear  the  possibilities  of  all  coming 
centuries. 

It  must  be  admitted  that  a  great  public  debt  is  not  merely 
a  source  of  weakness,  perpetuating  grievous  taxation,  but 
its  influence  is  anti- republican.  It  largely  increases  execu- 
tive patronage  by  bringing  forth  an  unusual  force  of  tax- 
gatherers,  as  well  as  a  hateful  brood  of  informers. 

Though  public  debts  are  often  justified  by  tlie  gravity  of 
the  occasion  which  gave  them  birth,  it  is  too  evident  that, 
per  se,  they  are  not  public  blessings.  If  President  Jackson 
had  thought  otherwise,  he  would  not  in  1835  have  announced 
in  such  exultant  tones  that  "  all  the  remains  of  the  public 
debt  have  been  redeemed."  Our  population  then  did  not 
reach  fifteen  millions,  and  the  hero  of  New  Orleans  was 


THE   TARIFF — MOBBILL.  315 

proud  of  the  fact  that  twenty-five  million  dollars  of  public 
debt  had  been  extinguished  in  three  years  !  A  generation 
has  passed  away  and  another  has  succeeded,  and  we  have 
paid  off  in  a  single  year  more  than  four  times  as  much  as 
was  paid  when  the  country  was  liberated  and  electrified  by 
the  feat  of  1835. 

Since  the  era  of  President  Jackson,  our  population  has 
more  than  trebled,  and  the  wealth  of  the  nation  is  many, 
many  times  greater  ;  but  the  future  President  who  may  have 
the  eminent  fortune  to  announce  to  the  American  people 
that  "  all  tho  remains  of  the  public  debt  have  been  redeemed  " 
will  mark  an  epoch,  and  such  a  day  will  be  once  more  cele* 
brated  as  a  national  jubilee.* 

The  future  of  our  country,  its  public  spirit  and  frugality, 
should  not  hereafter  be  less  distinguished  than  in  the  past ; 
and  the  American  policy,  payment  of  the  public  debt,  uni- 
versal education,  no  great  standing  army,  and  the  retention 
of  so  much  of  the  tariff  a^  will  furnish  ample  revenue  and 
secure  to  labor  both  employment  and  adequate  reward,  will 
continue  to  illustrate  our  career,  and  be  regarded  not  only 
with  patriotic  affection  by  our  own  people,  but  with  rapture 
by  many  people  less  fortunate. 

FKEE  TRADE  NOT  THE  CREED  OF  OUR  FATHERS. 

Among  the  original  States  of  tho  Union,  the  most  pros- 
perous and  most  advanced  in  manufactures,  as  well  as  all 
others,  gave  up  their  power  to  regulate  trade  and  commerce 
to  the  General  Government  ;  but  with  the  deep  conviction 
that  their  most  important  interests  would  receive  greater 
protection,  and  with  no  fear  that  they  would  then  or  ever  be 
neglected  or  trampled  under  foot.  Madison,  in  the  First 

*  "  This  month  of  January,  1835,1'  said  Mr.  Benton,  at  the  Washington  banquet, 
"  in  the  fif ty-eightli  year  of  the  Republic,  Andrew  Jackson  being  President,  the 
national  debt  is  paid,  and  the  apparition,  so  long  unseen  on  earth,  a  great  nation 
without  a  national  debt,  stands  revealed  to  the  astonished  vision  of  a  wondering 
world."' 


316  THE   TARIFF MORRILL. 

Congress,  said  such  a  neglect  would  be  a  fraud  on  the  States 
and  on  the  people.  What  inducements,  let  me  ask,  would 
citizens  have  had  to  pay  taxes,  fight  battles,  if  after  all  they 
were  to  have  no  other  protection  than  that  accorded  to 
foreigners  subject  to  no  tax  and  to  no  service  ?  If  State 
laws  regulating  trade  and  commerce  were  superseded,  States 
ripe  for  manufactures  felt  more  sure  of  being  fully  and 
efficiently  guarded  by  the  broad  shield  of  the  Union.  The. 
arms  they  laid  down  were  laid  down  to  be  placed  in  equally 
friendly  but  stronger  hands.  Invisible  local  boundaries 
were  to  give  place  to  ramparts  planted  on  national  frontiers. 
Free  trade  was  to  be  opened  to  coequal  sister  States,  and  to 
sister  States  only,  but  assuredly  not  to  be  opened  to  peoples 
bearing  no  part  of  our  public  burdens;  least  of  all,  not  to 
be  opened  to  foreign  rivals,  nor  to  foes  from  whom  we  had 
heroically  just  won  our  independence.  No  national  govern- 
ment  then  practiced  or  advertised  the  policy  of  free  trade, 
and  one  only  now  pretends  to  any  faith  in  that  much- 
battered  creed,  and  that  one  appears  nothing  loath  to  re- 
nounce it  whenever  and  wherever  adherence  fails  to  promote 
her  interests. 

States  having  a  deficient  population,  with  limited  manu- 
factures and  remote  from  markets,  most  require  protection. 
By  no  other  means  can  their  growth  and  prosperity  be  so 
surely  advanced.  It  is  manufactures  in  their  infancy,  in 
States  hardly  starting  in  diversified  occupations,  which  need 
creative  stimulus.  This  was  understood  and  declared  by  the 
framers  of  our  Constitution,  and  reiterated,  without  dis- 
cordant notes,  for  many  years  after  the  adoption  of  that 
instrument.  The  first  petition  to  Congress,  coming  from 
Maryland,  asked  for  protection  to  manufactures,  and  the 
next,  from  Virginia,  asked  for  protection  to  salt,  and  sub- 
sequently to  other  articles.  The  preamble  to  the  first  reve- 
nue act  set  forth  that  it  was  "for  the  discharge  of  the  debts 
of  the  United  States  and  encouragement  and  protection  of 


THE   TARIFF — MORRILL.  317 

manufactures."  The  Congress  of  1789  was  not  ashamed  to 
avow  its  policy,  and  did  not  hide  it  in  incidentals  nor  in 
judicious  euphemisms. 

OUR    EARLIEST    STATESMEN   ALL    FOR    PROTECTION. 

Hamilton,  after  Burke,  the  profoundest  statesman  of  his 
age,  while  Secretary  of  the  Treasury  under  President  Wash- 
ington, brought  forth  his  masterly  reports,  which  for  politi- 
cal wisdom  and  administrative  ability  will  be  consulted  and 
quoted  as  authority  as  long  as  our  Republic  endures.  His 
arguments  for  establishing  public  credit,  for  funding  the 
public  debt,  and  that  favoring  the  imposition  of  duties  on 
imports  for  the  protection  of  domestic  manufactures,  were 
unanswerable  then  and  unanswerable  they  remain,  and  hav- 
ing been  so  considered,  were  reprinted,  many  years  after  the 
tragical  death  of  the  author,  by  a  Democratic  Congress  as 
the  work  of  a  gifted  statesman,  lifted  far  above  the  plane  of 
merely  political  controversy. 

Jefferson,  in  his  u  Notes  on  Virginia,"  had  expressed  some 
views  adverse  to  the  establishment  of  manufactures,  but 
subsequently  his  views  underwent  a  radical  change,  and, 
besides  employing  twenty  of  his  slaves  in  making  nails,  he 
also  became  a  practical  manufacturer  to  the  extent  of  run- 
ning one  carding  machine,  two  spinning  jennies,  and  a  loom 
with  a  flying  shuttle.  In  1816  he  writes:  "Experience  has 
taught  me  that  manufactures  are  now  as  necessary  to  our 
independence  as  to  our  comfort." 

The  policy  of  protection  was  adhered  to  by  Adams  and 
Jefferson.  There  was  little  dissent,  apparently,  from  any 
quarter,  and  the  leading  argument  in  support  of  the  tariff 
of  1816,  must  be  credited  to  Mr.  Calhoun,  who,  almost  for 
the  first  time,  then  exhibited  his  remarkable  logical  resources 
in  debate.  It  was  supposed  that  future  wars  with  England 
were  probable,  possibly  inevitable,  and  absolute  independence 
in  peace  or  war  was  to  be  broadly  and  resolutely  asserted. 


318  THE   TARIFF — MORRILL. 

President  Monroe,  by  precept  and  example,  was  almost  a 
fanatic  as  to  the  policy  of  encouraging  American  manu- 
factures. Soon  after  he  was  inaugurated,  he  made,  in  1817, 
his  extensive  tour  through  the  Northern  and  Eastern  States, 
from  the  Atlantic  to  Detroit,  clad  in  blue  homespun  and  a 
cocked  hat.  He  was  met  by  crowds  of  people  at  every 
town,  and  he  not  only  thoroughly  inspected  our  naval 
depots,  arsenals,  and  fortifications,  but  he  was  equally  in- 
quisitive in  regard  to  our  very  humble  but  growing  manu- 
facturing establishments ;  and  one  very  small  one,  then  just 
starting,  for  the  manufacture  of  copperas,  in  my  native 
town,  he  traveled  much  out  of  his  way  to  visit  in  Vermont, 
which  enabled  me,  a  mere  child,  by  going  on  foot  two  miles 
and  a  half  on  a  rainy  day,  to  see  the  man  of  whom  Jeffer- 
son said  that  "  if  his  soul  were  turned  inside  out,  not  a  spot 
would  be  found  on  it." 

General  Jackson  was  a  member  of  the  Senate,  and  voted 
for  the  tariff  of  1824.  From  one  of  his  letters,  written  in 
the  same  spirit  with  which  he  had  earlier,  when  a  boy- 
prisoner,  refused  to  black  the  boots,  of  a  British  officer,  I 
copy  the  following  words: 

"  Upon  the  success  of  our  manufactures  as  the  handmaid 
of  agriculture  and  commerce,  depends,  in  a  great  measure, 
the  independence  of  our  country;  and  I  assure  you  that  none 
can  feel  more  sensibly  than  I  do  the  necessity  of  encour- 
aging them." 

There  is  no  authority  upon  the  interpretation  of  the  Con- 
stitution standing  above  that  of  James  Madison,  justly  called 
the  "  Father  of  the  Constitution."  His  letter  to  Professor 
Davis,  so  late  as  1833,  after  referring  with  approbation  to  a 
recent  tariff  speech  by  Mr.  Webster,  at  Pittsburgh,  presents 
elaborate  and  impregnable  arguments  in  behalf  of  protection, 
and  in  that  remarkably  cogent  and  lucid  style  which  adorned 
all  the  writings  of  this  peerless  statesman.  Might  not  this 
able,  patriotic,  and  unselfish  Virginian  have  said,  as  sadly 


THE   TARIFF — MORRILL.  319 

as  Bacon,  "  I  leave  my  name  and  memory  to  foreign  nations, 
and  to  mine  own  countrymen,  after  some  time  is  passed 
over"? 

Later  we  have  endured  seasons  of  instability,  but  our 
nearest  approaches  to  free  trade  have  been  seasons  of 
national  disaster,  strewn  with  the  wrecks  of  general  ruin, 
as  were  the  years  '37,  '47,  and  '57;  and  the  further  we  have 
receded  from  free  trade,  the  better  has  labor  fared  and  the 
greater  has  been  the  material  and,  I  do  not  hesitate  to  say, 
the  educational  advancement  of  the  country.  Free  trade 
with  foreign  nations  affords  no  buoyancy  to  life  at  home, 
but,  like  a  patent  life-preserver  wrongly  adjusted,  would  put 
our  heads  under  water  and  heels  uppermost. 

Henry  Clay,  personally,  long  the  best  beloved  public  man 
in  the  United  States,  was  most  distinguished  as  the  bold 
leader  of  protection  to  home  industries,  and  might  more 
than  once,  perhaps,  have  been  elected  to  the  Presidency, 
but  for  his  stiff  utterance,  his  "  rather  to  be  right  than  be 
President,"  and  his  moderate  opinions  upon  slavery  and 
Texas  annexation.  When,  among  other  States,  Missouri 
was  carried  for  him  in  1824,  Mr.  Benton  was  a  most  promi- 
nent supporter,  and,  upon  the  ground,  as  stated  by  him, 
"that  the  most  efficient  protector  of  American  iron,  lead, 
hemp,  wool,  and  cotton,  would  be  the  triumphant  champion 
of  the  new  tariff."  Mr.  Benton,  however,  soon  bowed  to 
other  gods;  and  Mr.  Clay,  in  1844,  was  beaten  by  Mr.  Polk 
on  the  Texas  issue,  and  also  by  having  his  protective  gar- 
ments suddenly  stolen  from  him  by  Mr.  Polk,  who  came 
out  at  the  last  moment  in  favor  of  "  fair  protection  to  our 
agriculture,  manufactures,  and  commerce."  At  the  decease 
of  Mr.  Clay,  Mr.  Brenckinridge,  a  life-long  political  adver- 
sary, but  a  knightly  neighbor,  declared  in  his  eloquent 
eulogy: 

"If  I  were  to  write  his  epitaph,  I  would  inscribe  as  the 
highest  eulogy  on  the  stone  which  shall  mark  his  resting- 


320  THE   TARIFF — MORRILL. 

place,  <  Here  lies  a  man  who  was  in  the  public  service  for 
fifty  years,  and  never  attempted  to  deceive  his  countrymen.'  " 

Kentucky  is  a  noble  State,  of  ample  proportions,  peopled 
by  a  gallant  race,  and  is  entitled  to  great  credit  for  the  pure- 
blooded  stock — the  Durhams  and  Lexingtons  —  of  her 
blue-grass  regions,  with  large  disputable  claims  for  the 
quantity  and  quality  of  her  pure  Bourbon  products;  but 
the  home  of  Henry  Clay  ought  to  have  led  our  people  in 
the  activities  of  material  development,  interweaving  all 
the  prosperity  evolved  by  various  skilled  industries;  and, 
though  Kentucky  has  not  been  a  leader  in  the  early  part  of 
the  race,  it  may  be  confidently  expected  she  will  yet  save 
herself  on  the  "  home-stretch."  Georgia  and  South  Caro- 
lina, losing  no  time  in  belated  hosannas  to  State-rights 
idolatries,  seem  alive  to  that  statesmanship  which  brings 
them  to  the  front  of  growing  prosperity;  and  mainly  be- 
cause these  elder  sister  States  with  great  energy,  appear 
now  to  have  practically  accepted  Henry  Clay's  masculine 
policy  of  "  entire  independence  of  all  foreign  States  as  re- 
spects our  essential  wants."  The  whole  country  owes  end- 
less  gratitude  to  the  great  Kentucky  statesman,  the  splendor 
of  whose  oratory  may  be  forgotten  and  his  compromises 
forgiven,  but  whose  early  patriotic  advocacy  of  American 
industries  and  their  protection,  will  forever  cause  his  mem- 
ory to  be  decorated  with  fresh  flowers  culled  by  the  hands 
of  labor  in  every  State. 

Among  turfmen  —  and  the  ministers  of  Great  Britain 
have  rarely  been  strangers  to  the  sports  of  the  turf  —  the 
well-known  rule  of  handicapping  for  differences  of  age,  or 
sex,  and  for  recorded  speed  in  previous  races  is  recognized 
and  inflexibly  demanded.  No  free-trade  axioms  are  tol- 
erated at  the  Derby,  but  younger  colts  and  fillies  are  pro- 
tected by  a  stringent  tariff  of  weights  against  greater  age 
and  against  prior  records  of  speed.  All  the  racers  of  Eng- 
land have  had  this  protection  increased  at  every  successive 


THE   TARIFF MORRILL.  321 

race  against  the  American  Parole  and  Iroquois.  If,  then, 
horses  may  with  stern  propriety  be  protected  against  any 
odds,  why  may  not  men?  If  it  would  have  been  wrong  to 
allow  Parole  to  carry  off  all  prizes  with  no  increase  of 
Weight  to  be  successively  borne,  it  would  be  equally  wrong 
to  permit  younger  and  less  experienced  nations  in  manu- 
factures to  submit  to  and  be  distanced  by  those  long  pos- 
sessed of  foremost  advantages  and  the  previous  winners  in 
many  contested  fields.  And  yet  the  owners  of  Manchester 
and  Birmingham  five-year-olds  hold  that  a  match  with 
Atlanta  and  Indianapolis,  two-year-olds,  is  equal,  just,  and 
scientific,  and  refuse  to  be  comforted  whenever  they  are 
fairly  handicapped  by  protective  tariffs. 

Rather  vain  of  our  Anglo-Saxon  origin,  as  we  all  willingly 
admit  ourselves  to  be,  wo  are  also  prone  to  think  much  of 
English  blood  in  the  brute  creation.  Accordingly  will  it  be 
denied  that  ^  a  few  of  o,ur  most  erudite  and  highest  bred 
American  newspaper  editors,  who  have  adopted  as  a  science 
the  eccentric  free-trade  dogma  of  Great  Britain,  appear  to 
have  a  strange  fancy  for  an  English  bull-dog  at  their  front 
doors  to  bark  at  everything  American  which  passes  by,  and 
were  those  who  follow  the  teachings  of  Jefferson  and  Clay, 
of  Jackson  and  Webster,  to  be  passing,  would  they  not  have 
to  jump  out  of  their  tracks  or  find  the  teeth  of  these  un- 
American  dogs  in  the  calves  of  their  legs  ? 

But  whenever  these  editors,  otherwise  excellent,  come  to 
thoroughly  explore  their  free-trade  dogma,  they  will  find  it 
like  all  other  commercial  rules  and  regulations,  solely  a  mat- 
ter of  expediency,  destitute  of  even  a  protoplasm  of  exact 
science,  and  then  it  may  be  expected  that  these  barking 
sentinels  will  no  longer  be  useful  even  in  the  most  vociferous 
partisan  warfare. 

THE    TARIFF    OF    1861. 

The  tariff  act  of  1861,  which,  by  a  nick-name  given  by 
baffled  opponents  as  an  echo  to  a  name  so  humble  as  my 
14* 


322  THE    TARIFF MORRILL. 

own,  it  was  perhaps  hoped  to  render  odious,  was  yet 
approved  by  a  Democratic  President,  and  gave  to  Mr.  Bu- 
chanan a  much -needed  opportunity  to  perform  at  last  one 
official  act  approved  by  the  people. 

If  I  refer  to  this  measure  it  will  not  be  egotistically,  nor 
to  shirk  responsibility,  but  only  in  defense  of  those  who 
aided  its  passage — such  as  the  never-to-be-forgotten  Henry 
"Winter  Davis,  Thad.  Stevens,  and  "William  A.  Howard,  and, 
let  rne  add,  the  names  of  Fessenden  and  Crittenden — and, 
without  the  parliamentary  skill  of  one  [Mr.  Sherman]  now 
a  member  of  this  body,  its  success  would  not  have  been 
made  certain. 

And  yet  this  so-called  "Morrill  tariff,"  hooted  at  as  a 
"  Chinese  wall "  that  was  to  shut  out  both  commerce  and 
revenue,  notwithstanding  amendments  subsequently  piled 
and  patched  upon  it  at  overy  fresh  demand  during  the  war, 
but  retaining  its  vertebrae  and  all  of  its  specific  characteris- 
tics, has  been  as  a  financial  measure  an  unprecedented  suc- 
cess in  spite  of  its  supposed  patronymical  incumbrance. 
Transforming  ad  valorem  duties  into  specific,  then  aver- 
aging but  25  per  cent,  upon  the  invoice  values,  imposing 
much  higher  rates  upon  luxuries  than  upon  necessaries,  and 
introducing  compound  duties*  upon  woolens,  justly  com- 
pensatory for  the  duties  on  wool,  it  has  socured  all  the  reve- 
nue anticipated,  or  $198,159,676  in  1881  against  $53,187,- 
511  in  1860,  and  our  total  trade,  exports  and  imports  in 
1860,  of  $687,192,176,  appears  to  have  expanded  in  1880  to 
$1,613,770,633,  with  a  grand  excess  of  exports  in  our  favor 
of  $167,683,912,  and  an  excess  in  1881  of  $259,726,254, 
while  it  was  $20,040,062  against  us  in  1860.  A  great 
reduction  of  the  public  debt  has  followed,  and  the  interest 
charged  has  fallen  from  $143,781,591  in  1867  to  about  $60,- 
500,000  at  the  present  time. 

If  such  a  result  is  not  a  practical  demonstration  of  healthy 

*  The  Dominion  of  Canada  has  since  imposed  duties  upon  a  large  number  of 
articles. 


THE   TARIFF — MORRILL.  323 

intrinsic  merits,  when  both  revenue  and  commerce  increase 
in  much  greater  ratio  than  population,  what  is  it  ?  Our 
imports  in  the  past  two  years  have  been  further  brilliantly 
embellished  by  $167,060,041  of  gold  and  silver  coin  and 
bullion,  while  retaining  in  addition  all  of  our  own  immense 
domestic  productions ;  and  it  was  this  only  which  enabled  us 
to  resume  and  to.  maintain  specie  payments.  Let  the  con- 
trast of  1860  be  also  borne  in  mind,  when  the  excess  of  our 
exports  of  gold  and  silver  was  $57,996,004. 

As  a  protective  measure  this  tariff,  with  all  its  additional 
amendments,  has  proven  more  satisfactory  to  the  people  and 
to  various  industries  of  the  country  than  any  other  on  record. 
The  jury  of  the  country  has  so  recorded  its  verdict.  Agri- 
culture has  made  immense  strides  forward.  The  recent 
exports  of  food  products,  though  never  larger,  is  not  equal 
by  twenty-fold  to  home  consumption,  and  prices  are  every- 
where'more  remunerative,  agricultural  products  being  higher 
and  manufactures  lower.  Of  wheat,  corn,  and  oats,  there 
was  produced  1,184,540,849  bushels  in  1860,  but  in  1880 
the  crop  had  swelled  to  2,622,200,039  bushels,  or  had  much 
more  than  doubled.  Since  1860  lands  in  many  of  the 
Western  States  have  risen  from  100  to  175  per  cent.  The 
production  of  rice,  during  the  same  time,  rose  from  11,000,- 
000  pounds  to  117,000,000  pounds.  The  fires  of  the  tall 
chimneys  have  everywhere  been  lighted  up;  and  while  we 
made  only  987,559  tons  of  pig-iron  in  1860,  in  1880  we 
made  4,295,414  tons;  and  of  railroad  iron  the  increase  was 
from  235,107  tons  to  1,461,837  tons.  In  twenty  years  the 
production  of  salt  rose  from  12,717,200  bushels  to  29,800,- 
298  bushels.  No  previous  crop  of  cotton  equaled  the  4,- 
861,000  bales  of  1860,  but  the  crop  of  1880  was  larger,  and 
that  of  1881  is  reported  at  6,606,000  bales  The  yield  of 
cotton  from  1865  to  1881  shows  an  increase  over  the  fifteen 
years,  from  1845  to  1861,  of  14,029,000  bales,  or  almost  an 
average  gain  of  a  million  bales  a  year. 


THE   TARIFF — MORRILL. 


The  giant  water-wheels  have  revolved  more  briskly,  show- 
ing the  manufacture  of  1,797,000  bales  of  cotton  in  1880 
against  only  979,000  bales  in  1860,  and  this  brought  up  the 
price  of  raw  cotton  to  higher  figures  than  in  1860.  Thir- 
teen States  and  one  Territory  produced  cotton,  but  its  man- 
ufacture spreads  over  thirty  States  and  one  Territory.  The 
census  of  cotton  manufactures  shows: 


I860. 

1880. 

Capital  invested,  

$98,585,269 

$208,280,346 

Number  of  operatives,  

122,028 

175,187 

^Va^cs  paid 

$23  940,108 

$41  921  106 

Value  of  productions,  

115,681,774 

192,773,960 

It  will  be  found  that  a  larger  amount  of  capital  has  been 
invested  in  cotton  mills  than  in  woolen,  and  that  the  increase 
of  productions  has  been  large  and  healthy,  a  very  hand- 
some proportion  of  which  is  to  be  credited  to  Southern 
States.  Goods  of  many  descriptions  have  also  been  cheap- 
ened in  price.  Standard  prints  or  calicos  which  sold  in 
1860  for  nine  and  one-half  cents  per  yard  now  sell  for  six 
and  one-half  cents. 

The  census  returns  of  woolen  manufactures  show  the 
following  astonishing  results: 


1880. 

1860. 

Males  employed,  

74,367 

24,841 

Females  employed,  .  

65,261 

16,519 

Capital  invested   

$159.091,869 

$30,862,654 

Wages  paid,  ... 

47,115,614 

9,808,254 

Value  of  raw  material  consumed,  .  .  . 
Value  of  annual  product  

162,609,436 
265,684,796 

36,586,887 
61  895,217 

Importations  of  woolens,  

33,613,897 

37,876,945 

Annual  production  of  wool,  pounds,  . 

264,500,000 

60,511,343 

It  thus  appears,  that  while  the  number  of  hands  employed 


THE    TARIFF — MOURILL.  325 


is  three  times  and  a  half  larger  than  in  1860,  the  wages 
paid  is  about  five  times  larger  and  the  capital  is  five  times 
greater.  The  annual  productions  have  been  more  than 
quadrupled,  and  the  aggregate  importations  have  fallen  off 
over  four  millions.  With  these  results  in  our  front,  pro- 
tection on  wool  and  woolens  will  be  likely  to  withstand  the 
hand-grenades  of  all  free-trade  besiegers. 

In  New  England  and  some  other  States  sheep  husbandry 
has  fallen  off,  and  in  some  places  it  has  been  replaced  b}^  the 
dairy  business;  but  in  other  States  the  wool-clip  has  largely 
increased,  especially  has  the  weight  of  the  fleece  increased. 
The  number  of  sheep  has  increased  about  80  per  cent.,  and 
the  weight  of  wool  over  400  per  cent.  The  discovery  that 
the  fine  long  merino  wools,  known  as  the  American  merino, 
are  in^  fact  the  best  of  combing  wools  and  now  used  in  many 
styles  of  dress-goods  has  added  greatly  to  their  demand  and 
value.  Many  kinds  of  woolen  goods  can  be  had  at  a  less 
price  than  twenty  years  ago.  Cashmerets  that  then  brought 
forty-six  cents  per  yard  brought  only  thirty-eight  and  one- 
fourth  cents  in  1880,  and  muslin  de  laines  dropped  from 
twenty  cents  to  fifteen,  showing  that  the  tariff  did  not  make 
them  dearer,  but  that  American  competition  caused  a  reduc- 
tion of  prices. 

The  length  of  our  railroads  has  been  trebled,,  rising  from 
31,185  miles  in  1860  to  94,000  miles  in  1881,  and  possibly 
to  one-half  of  all  in  the  world.  For  commercial  purposes 
the  wide  area  of  our  country  has  been  compressed  within 
narrow  limits,  and  transportation  in  time  and  expense,  from 
New  York  to  Kansas,  or  from  Chicago  to  Baltimore,  is  now 
less  formidable  than  it  was  from  Albany  or  Pittsburgh  to 
Philadelphia  prior  to  the  era  of  railroads.  The  most  distant 
States  reach  the  same  markets,  and  are  no  longer  neighbors- 
in-lawT,  but  sister  States.  The  cost  of  eastern  or  western 
bound  freight  is  less  than  one-third  of  former  rates.  Work- 
ingmen,  including  every  ship-load  of  emigrants,  have  found 


326  THE    TARIFF MOBRILL. 

acceptable  employment.  Our  aggregate  wealth,  in  1860  was 
§19,089,156,289,  but  is  estimated  to  have  advanced  in  1880 
to  over  forty  billions.  Further  examination  will  show  that 
the  United  States  are  steadily  increasing  in  wealth,  and  in- 
creasing, too,  much  more  rapidly  than  free-trade  England, 
notwithstanding  all  her  early  advantages  of  practical  expe- 
rience and  her  supremacy  in  accumulated  capital.  The  in- 
crease of  wealth  in  France  is  twice  as  rapid  as  in  England, 
but  in  the  United  States  it  is  more  rapid  than  even  in  France. 

These  are  monumental  facts,  and  they  can  no  more  be 
blinked  out  of  sight  than  the  Alleghanies  or  the  Rocky 
Mountains.  They  belong  to  our  country,  and  sufficiently 
illustrate  its  progress  and  vindicate  the  tariff  of  1861.  If 
the  facts  cannot  be  denied,  the  argument  remains  irrefutable. 
If  royal  u  cowboys  "who  attempted  to  whistle  down  Ameri- 
can independence  one  hundred  years  ago  ingloriously  failed, 
so  it  may  be  hoped  will  fail  royal  trumpeters  of  free  trade 
who  seem  to  take  sides  against  the  United  States  in  all  com- 
mercial contests  for  industrial  independence. 

Among  the  branches  of  manufactures  absolutely  waked 
Into  life  by  the  tariff  of  1861,  and  which  then  had  no  place 
above  zero,  may  be  named  crockery  and  china  ware.  The 
number  of  white-ware  factories  is  now  fifty-three,  with  forty 
decorating  establishments;  and  the  products,  amounting  to 
several  millions,  are  sold  at  prices  twenty-five  to  fifty  per 
cent,  below  the  prevailing  prices  of  twenty  years  ago.  Clay 
and  kaolin  equal  to  the  best  in  China  have  been  found  East, 
West,  and  South  in  such  abundance  as  to  promise  a  large 
extension  of  American  enterprise,  not  only  in  the  ordinary 
but  in  the  highest  branches  of  ceramic  art.  Steel  may  also 
here  claim  its  birth.  No  more  of  all  sorts  than  11,838  tons 
were  made  in  1860,  but  1,397,015  tons  were  made  in  1880. 
Those  who  objected  to  a  duty  on  steel,  have  found  that  they 
were  biting  something  more  than  a  file.  Silks  in  I860, 
hardly  unwound  from  the  cocoon,  were  creeping  along  with 


THE    TARIFF — MORRILL.  327 

a  small  showing  of  sewing  silk  and  a  few  trimmings,  but 
now  this  industry  rises  to  national  importance,  furnishing 
apt  employment  to  many  thousand  women  as  well  as  to  men, 
and  the  annual  products,  sharply  competing  with  even  the 
Bonnet  silks  of  Lyons,  amount  to  the  round  sum  of  $34,- 
500,000.  Notwithstanding  the  exceptionally  heavy  duties, 
I  am  assured  that  silk  goods  in  general  are  sold  for  twenty- 
five  per  cent,  less  than  they  were  twenty  years  ago 

Plate  glass  is  another  notable  manufacture,  requiring  great 
scientific  and  mechanical  skill  and  large  capital,  whose  origin 
bears  date  since  the  tariff  of  1861.  It  is  made  in  Missouri 
and  in  Indiana,  and  to  a  small  extent  in  Kentucky  and 
Massachusetts;  but  in  Indiana  it  is  made  of  the  purest  and 
best  quality  by  an  establishment  which,  after  surmounting 
many  perils,  has  now  few  equals  in  the  magnitude  or  per- 
fection of  its  productions,  whether  on  this  or  the  other  side 
of  the  Atlantic,  and  richly  merits  not  only  the  favor  but  the 
patronage  of  the  Government  itself.  Copper  is  another 
industry  upon  which  a  specific  duty  was  imposed  in  1861, 
which  has  had  a  rapid  growth,  and  now  makes  a  large  con- 
tribution to  our  mineral  wealth.  The  amount  produced  in 
1860  was  less  than  one-fifth  the  present  production,  and 
valued  at  $2,288,182;  while  in  1880,  the  production  rose  to 
the  value  of  $8,849,961.  The  capital  invested  increased 
from  $8,525,500,  to  $31,675,096.  In  1860,  the  United 
States  Mint  paid  from  twenty-three  and  one-half  to  twenty- 
five  cents  per  pound  for  copper;  but  has  obtained  it  the 
present  year  under  a  protective  tariff  as  low  as  seventeen 
cents.  Like  our  mines  of  inexhaustible  coal  and  iron, 
copper  is  found  in  many  States,  some  of  it  superior  to  any 
in  the  world,  and  for  special  uses  is  constantly  sought  after 
by  foreign  governments. 

Many  American  productions  sustain  the  character  they 
have  won  by  being  the  best  in  the  world.  Our  carpenters 
and  joiners  could  not  be  hired  to  handle  any  other  than 


328  THE    TARIFF — MOllllILL. 

American  tools;  and  there  are  no  foreign  agricultural  imple- 
ments, from  a  spade  to  a  reaper,  that  an  American  farmer 
would  accept  as  a  gift.  There  is  no  saddlery  hardware,  nor 
house-furnishing,  equal  in  quality  and  style  to  American. 
Watches  and  jewelry  and  the  electro  gold  and  silver  plated 
ware  of  American  workmanship  as  to  quality  have  the 
foremost  place  in  the  marts  of  the  world.  The  superiority 
of  our  staple  cotton  goods  is  indisputable,  as  is  proven  by 
the  tribute  of  frequent  counterfeits  displayed  abroad.  The 
city  of  Philadelphia  alone  makes  many  better  carpets  and 
more  in  quantity  than  the  whole  of  Great  Britain.  These 
are  noble  achievements,  which  should  neither  be  obscured 
nor  lost  by  the  sinister  handling  and  industrious  vituperation 
of  free-trade  monographists. 

The  vast  array  of  important  and  useful  inventions 
recorded  in  our  Patent  Office,  and  in  use  the  world  over, 
shows  that  it  is  hardly  arrogance  for  us  to  accept  the  com- 
pliment of  Mr.  Cobden,  and  claim  that  the  natural  mechani- 
cal genius  of  average  Americans  will  soon  appear  as  much 
superior  to  that  of  Englishmen  as  was  that  of  Englishmen 
one  hundred  years  ago  to  that  of  the  Dutch. 

THE  TARIFF  SHIELDED  US  IN  1873. 

If  we  had  been  under  the  banner  of  free  trade  in  1873, 
when  the  wide-spread  financial  storm  struck  our  sails,  what 
would  have  been  our  fate?  Is  it  not  apparent  that  our 
people  would  have  been  stranded  on  a  lee  shore,  and  that 
the  general  over-production  and  excess  of  unsold  merchan- 
dise everywhere  abroad  would  have  come  without  hindrance, 
with  the  swiftness  of  the  winds,  to  find  a  market  here  at 
any  price  ?  As  it  was,  the  gloom  and  suffering  here  were 
very  great,  but  American  workingmen  found  some  shelter 
in  their  home  markets,  and  their  recovery  from  the  shock 
was  much  earlier  assured  than  that  of  those  who  in  addition 


THE    TARIFF— MORRILL.  329 

to  their  own  calamities  had  also  to  bear  the  pressure  of  the 
hard  times  of  other  natioDS. 

In  six  years,  ending  June  30,  1881,  our  exports  of 
merchandise  exceeded  imports  by  over  $1,175,000,000 — a 
large  sum  in  itself,  largely  increasing  our  stock  of  gold, 
filling  the  pockets  of  the  people  with  more  than  two  hundred 
and  fifty  millions  not  found  in  the  Treasury  or  banks,  making 
the  return  to  specie  payments  easy,  and  arresting  the  painful 
drain  of  interest  so  long  paid  abroad.  It  is  also  a  very  con- 
clusive refutation  of  the  wild  free-trade  chimeras  that  exports 
are  dependent  upon  imports,  and  that  comparatively  high 
duties  are  invariably  less  productive  of  revenue  than  lo\\ 
duties.  The  pertinent  question  arises,  shall  we  not  in  the  main 
hold  fast  to  the  blessings  we  have  ?  As  Americans  we  must 
reject  free  trade.  To  use  some  words  of  Burke  upon  another 
subiect :  u  If  it  be  a  panacea  we  do  not  want  it.  We  know  the 
consequences  of  unnecesssry  physic.  If  it  be  a  plague,  it  is 
such  a  plague  that  the  precautions  of  the  most  severe  quar- 
antine ought  to  be  established  against  it." 

FREE-TRADE    PROSPERITY    ON    THE    WANE. 

It  gives  me  no  pleasure  to  notice  retrograde  steps  in 
the  prosperity  of  Great  Britain;  and  if  some  evidence  of 
this  sort  is  brought  out,  like  that  of  the  five  thousand  houses 
now  marked  "To  let"  in  Sheffield,  and  ten  thousand  in  Bir- 
mingham, it  will  have  no  other  purpose  than  to  show  that 
free  trade  has  failed  to  secure  the  promised  supremacy  to 
English  manufactures.  The  avowal  of  Mr.  Gladstone  that 
the  additional  penny  to  the  income  tax  produces  less  revenue 
than  formerly,  indicates  a  positive  decrease  of  wealth;  and 
the  steady  diminution  of  British  exports  since  1873,  amount- 
ing in  1880  to  one  hundred  and  sixty  million  dollars,  with  a 
diminution  in  the  total  of  exports  and  imports  of  two  hun- 
dred and  fifty  million  dollars,  is  more  conclusive  proof  as  well 
of  British  decadence  as  of  the  advancement  of  other  nations. 


330  THE   TARIFF — MORRILL. 

COMMEKCIAL    PROTECTION. 

The  sum  of  our  annual  support  bestowed  upon  the  Navy, 
like  that  bestowed  upon  the  Army,  may  be  too  close-fisted 
and  disproportionate  to  our  extended  ocean  boundaries,  and 
to  the  value  of  American  commerce  afloat;  yet  whatever 
has  been  granted  has  been  designed  almost  exclusively  for 
the  protection  of  our  foreign  commerce,  and  amounts  in  the 
aggregate  to  untold  millions.  Manufacturers  do  not  com- 
plain that  this  is  a  needless  and  excessive  favor  to  importers; 
and  why,  then,  should  importers  object  to  some  protection 
to  a  much  larger  amount  of  capital,  and  to  far  greater  num- 
bers embarked  certainly  in  an  equally  laudable  enterprise  at 
home? 


CHAPTER  XIX. 

THE  ESTABLISHMENT   OF  PROTECTION   IN   THE 
UNITED  STATES.* 

BY  PROF.  W.  G.  SUMNER, 
Yale  College. 


IN  my  last  lecture  I  sketched  the  origin  of  the  protective 
system  in  this  country  0  I  now  proceed  to  describe  its 
growth  and  establishment.  This  was  brought  about  by 
incidents  connected  with  the  Napoleonic  wars.  The  wars  of 
the  French  revolution,  and  those  which  followed,  produced 
great  effects  upon  the  trade  of  the  civilized  worldo  The 
United  States,  as  the  chief  neutral  carrier,  saw  its  shipping 
multiplied  and  its  mercantile  interests  enriched.  The  bellig- 
erents, in  their  struggles  to  injure  each  other,  endeavored  to 
put  a  stop  to  this  neutral  traffic,  and  inflicted  great  injury 
on  the  neutral  who  was  carrying  it  on.  Nevertheless,  the 
profits  were  so  great  that  the  Americans  continued  it,  in 
spite  of  losses.  When  war  broke  out  again  in  1803,  the 
indignation  here  at  the  collisions  which  took  place  was  so 
great,  that  measures  of  resistance  and  retaliation  were 
sought.  The  federalists  wanted  to  put  the  country  in  a  state 
of  defense  and  build  a  navy  to  protect  commerce.  They 
represented  the  Northeastern  States  and  the  shipping  inter- 
ests. The  administration,  however,  with  the  great  majority 
from  the  Middle  and  Southern  States,  demanded  a  navy, 
sought  to  reduce  expenditures,  and  turned  its  attention  to 


*  History  of  Protection  in  the  United  States^  Lecture  IV. 

(331) 


PROTECTION    IN    U.  S.  —  SUMNER. 


measures  of  coercion  by  commercial  war.  These  measures 
had  been  tried  with  sad  results  during  the  Eevolution.  Mr. 
Madison  had  urged  discriminating  duties  in  the  first  tariff 
as  a  means  of  forcing  foreign  nations  to  grant  reciprocity, 
and  he  had  urged  coercive  and  retaliatory  measures  of  that 
kind  during  Washington's  administration  when  hostilities  in 
Europe  first  broke  out.  It  is  astonishing  what  faith  was 
entertained  in  such  measures.  You  see  it  still  strong  in  the 
South  when  the  civil  war  broke  out,  when  it  was  believed 
that  withholding  cotton  would  force  European  nations  to 
intervene. 

In  1805  an  act  was  passed  for  prohibiting  the  importation 
of  English  manufactures  in  order  to  force  England  to  give 
up  impressment,  and  in  order  to  support  Pinckney  and 
Monroe  in  their  efforts  to  make  a  treaty.  In  1806  England 
blockaded  the  northern  coast  of  Europe  from  Brest  to  the 
Elbe.  Napoleon  retaliated  by  the  Berlin  decree.  In  the 
next  year  England  replied  by  the  orders  in  council  ;  Napo- 
leon rejoined  by  the  Milan  decree,  and  England  returned 
once  more  by  more  stringent  prohibitions.  The  tenor  of 
these  decrees  on  the  one  side  and  on  the  other  was  to 
prohibit  neutrals  from  trading  with  the  enemy,  or  to  put 
such  trade  under  heavy  restraints.  Napoleon  was  trying  to 
shut  the  continent  against  English  manufactures,  and  Eng- 
land was  trying  to  keep  out  of  the  continent  provisions 
and  colonial  supplies.  Between  the  two,  neutral  commerce 
suffered  the  greatest  loss  and  vexation.  The  American 
shipowners  complained  and  called  on  their  government  for 
protection.  The  measure  adopted  was  the  embargo  of  1807, 
by  which  the  shipowners  were  protected  against  foreign 
aggressors  by  being  shut  up  at  home.  They  had  before 
incurred  heavy  risks,  now  their  own  government  imposed 
certain  ruin.  It  was  necessary  to  pass  one  act  after  another, 
making  the  embargo  more  stringent  and  tyrannical  in  order 
to  check  evasions  of  it.  It  was  repealed  in  a  little,  over  a 


PROTECTION   IN   U.  S. — SUMNER.  333 

year,   but   non -intercourse   and   non-importation   acts   were 
substituted  for  it  until  war  grew  out  of  it  in  1812. 

"We  are  concerned  with  this  commercial  war  here,  not  on 
account  of  its  folly  or  imbecility,  although  it  well  represents 
the  folly  of  all  restriction,  but  on  account  of  its  connec^ 
tion  with  the  strand  of  history  which  we  are  following. 
Embargo,  non-intercourse,  and  war,  lasting  from  1807  to 
1815,  created  an  entirely  artificial  state  of  things  here,  or, 
perhaps  I  should  say,  the  United  States  was  drawn  into  the 
distortion  and  perversion  of  industry  and  commerce  which 
the  great  wars  were  producing  in  Europe.  Manufactories 
of  various  kinds  sprang  up  here  to  supply  the  wants  of  the 
people  when  cut  off  from  the  usual  sources  of  supply  by 
foreign  exchange.  They  produced  articles  of  inferior  quality 
or  design,  generally  speaking,  but  people  had  to  be  satisfied 
with  them.  In  many  cases  also  the  products  were  dearer 
than  those  normally  obtainable  abroad.  They  were  sustained 
by  the  artificial  difficulties  in  foreign  exchange,  and  by  the 
diminished  profits  of  other  industries  which  would  have  been 
more  profitable  here.  In  1810,  Gallatin,  Secretary  of  the 
Treasury,  made  a  report  in  which  he  stated  that  manufac- 
tures of  wood  and  leather,  Amongst  other  things,  were 
exported  beyond  the  imports,  that  the  following  industries 
were  " firmly  established,"  iron  and  manufactures  of  iron, 
manufactures  of  cotton,  wool,  and  flax,  paper,  printing  types, 
books,  several  manufactures  of  hemp,  and  a  few  others.  In 
that  year  (1810)  some  effort  was  made  to  get  more  protection 
through  duties,  but  nothing  came  of  it.  The  same  effort 
played  some  share  in  bringing  about  the  war,  which  was  a 
product  of  intrigue,  and  as  needless  as  it  was  fruitless.  One 
of  the  first  war  measures  was  to  double  all  duties  and  pro- 
hibit the  import  of  English  products.  During  the  war  the 
prices  of  manufactured  articles  were  very  high.  Manufac- 
turers made  great  profits  and  factories  were  built  in  large 
numbers.  In  1814  all  the  banks  suspended  specie  payments, 


334  PROTECTION   IN    U.  S. — SUMNER. 

and  then  followed  a  reckless  paper-money  period  which  has 
never  been  equaled  since.  Prices  rose  higher  than  ever, 
and  here  we  have  again  an  illustration  of  the  observation 
previously  made  that  our  currency  and  tariff  errors  have 
been  intertwined  throughout  our  history. 

Observe  now  the  outcome  of  all  this  for  the  matter  of  our 
investigation.  Embargo  and  war  had  created  a  false  and 
artificial  state  of  things  in  which  much  capital  had  been 
invested  in  manufactures,  and  "  industry  "  had  been  "  encour- 
aged." Under  the  false  light  in  which  they  were  viewed, 
embargo  and  war,  therefore,  seemed  to  be  beneficial  forces. 
The  return  of  peace,  if  it  reopened  trade  and  let  things 
return  to  their  normal  condition,  would  be  a  calamity.  It 
was  necessary  to  secure  a  continuance  of  the  circumstances 
which  had  brought  these  industries  into  existence,  in  order 
to  secure  them  from  destruction.  Such  continuance  could 
not  be  brought  about  without  perpetuating  for  the  great 
body  of  consumers  the  scarcity,  loss,  and  distress  of  war,  so 
far  as  war  affected  their  power  to  procure  and  enjoy  indus- 
trial products.  This  then  is  exactly  what  the  tariff,  which 
was  adopted  in  1816,  did  do.  It  saved  a  part  of  the  capital 
involved  in  manufactures,  although  most  of  it  was  swept 
away  in  the  financial  crisis  which  ensued  in  1819,  on  the 
collapse  of  the  paper  system,  but  it  burdened  the  nation  with 
the  same  trammels  which  embargo  and  war  had  laid  upon  it. 

The  act  of  May  3,  1815,  repealed  all  discriminating  duties 
and  tonnage  taxes  in  favor  of  any  nation  which  should  take 
similar  action  with  regard  to  American  vessels  and  cargoes. 
Here  we  have  a  fact  of  interest  to  the  general  history  which 
we  are  pursuing.  This  was  what  was  known  as  the  "  Ameri- 
can system,"  at  this  time.  We  saw  how,  in  the  treaty  with 
France  in  1778,  the  Americans  set  out  to  gain  general 
reciprocity.  That  came  to  be  called  the  "  American  system," 
viz.,  general  reciprocity  instead  of  the  old  commercial  treat- 
ies, Now  the  plan  of  laying  countervailing  duties  to  enforce 


PROTECTION    IN    U.  S. SUMNER.  335 

reciprocity  came  to  be  called  tlie  "  American  system,"  and 
was  so  called  until  1824,  when,  by  a  still  further  perversion, 
that  name  was  applied  to  the  system  of  protective  duties. 
Daniel  Webster,  at  that  time,  well  said  of  it :  "  This  favorite 
American  policy  is  what  America  has  never  tried  ;  and  this 
odious  foreign  policy  is  what,  as  we  are  told,  foreign  states 
have  never  pursued." 

The  act  of  February  5,  1816,  continued  the  double  war 
duties  until  July  1st,  but  the  general  tariff  act  was  approved 
April  27,  1816.  The  tariff  was  not  at  this  time,  or  for 
sixteen  years  after,  a  political  question,  but  it  is  noteworthy 
that  tariffs  were  passed  in  every  presidential  year  until  1832, 
except  in  1820.  All  parties  agreed,  however  reluctantly,  in 
passing  the  increased  duties,  for  fear  of  alienating  the  votes 
of  the  protected  interests.  In  1820  a  tariff  was  proposed, 
but  failed,  because  Mr.  Monroe  was  to  be  re-elected  without 
a  contest.  As  yet,  however,  in  1816,  the  question  was^. 
neither  political  nor  sectional.  -New  England  generally 
opposed  the  tariff,  but  not  universally.  The  South  a0ce«tedr 
to  it  for  the  sake  of  cotton.  This  article  was  then  heavily 
taxed  abroad,  and  some  very  cheap  manufactures  of  it  from 
China  and  India  were  largely  imported.  It  was  believed 
that  the  development  of  cotton  manufactures  here  was  the 
best  way  to  make  cotton  culture  lucrative.  Lowndes  of 
South  Carolina  reported  the  bill,  and  Calhoun  made  a 
speech  in  favor  of  it.  It  was  based  on  a  report  by  Dallas, 
Secretary  of  the  Treasury,  in  which  he  divided  the  articles 
subject  to  duty  into  three  classes:  (1)  those  of  which  the 
home  supply  was  adequate  to  the  demand;  (2)  those  of 
which  the  supply  was  partial;  (3)  those  of  which  the  supply 
was  small  or  nothing.  He  proposed  graduated  duties  on 
these  three  classes,  the  highest  duty  falling  on  the  first  class. 
You  observe  at  once  the  incongruity.  On  the  plan  of  fos- 
tering infant  industries,  duties  would  evidently  be  highest 
on  articles  producible  but  not  produced,  or  only  slightly 


83G  PROTECTION    IN    U.  S. SUMNER. 

produced;  but  here  we  find  the  market  closed  when  the  sup- 
ply is  adequate,  and  only  a  revenue  tax  laid  on  those  articles 
which  were  least  produced,  and  a  medium  tax  on  those 
which  were  in  the  heat  of  the  struggle.  It  is  the  best  pos- 
sible test  of  a  theory  to  see  whether  it  admits  of  two  con- 
tradictory  applications  in  practice,  for  between  theory  and 
practice  there  can  be  no  inconsistency.  If  any  appears,  it 
is  proof  positive  that  either  the  theory  or  the  practice  needs 
revision  and  correction.  To  say  that  a  thing  is  true  in 
theory  but  bad  in  practice  is  a  radical  absurdity.  Theory 
is  the  attempt  of  man  to  learn  general  principles  for  guid- 
ance in  his  practical  tasks.  Practice  is  the  test  of  theory, 
and  shows  that  the  general  principles  have  been  either 
correctly  or  incorrectly  apprehended.  When,  therefore,  a 
theory  admits  of  two  opposite  applications  in  practice,  one 
of  which  fits  it  as  well  as  the  other,  it  proves  conclusively 
that  the  theory  embraces  a  contradiction,  and  we  see  why 
protection  of  infant  industries  never  leads  to  their  inde- 
pendence and  to  free  trade.  The  advocates  of  protection 
use  the  first  form  of  the  theory  to  secure  its  adoption  and 
the  second  to  secure  its  perpetuation. 

Calhoun's  chief  argument  for  protection  was  the  need  of. 
the  proposed  manufactures  in  case  of  war.  This  argument 
had  considerable  force  at  the  end  of  a  war  in  which  foreign 
supplies  had  been  cut  off,  but  on  the  other  hand,  the  exac- 
tions of  the  manufacturers  during  the  war  led  many  to 
resent  any  attempt  now  to  favor  them. 

The  argument  for  protection  to  provide  against  the  con- 
tingency of  war  has  great  popular  weight.  The  policy  and 
history  of  the  United  States  since  1816,  however,  afford  a 
striking  commentary  on  it.  We  have  always  kept  our 
army  down  a  little  below  the  point  of  efficiency.  We  have 
grudged  the  education  of  a  few  officers.  We  have  reduced 
our  navy  so  low  that  we  hardly  do  our  share  in  the  police 
of  the  ocean.  We  pay  little  heed  to  our  fortifications.  Yet 


PROTECTION   IN    U.  S. — SUMNER.  337 

we  voluntarily  expose  ourselves  to  a  loss  far  greater  than 
tlie  cost  of  any  armament,  out  of  obedience  to  this  notion 
of  providing  for  a  possible  war  by  industrial  restraints. 
Our  popular  orators  formerly  made  much  capital  by  com- 
paring our  expenditures  for  army,  navy,  and  fortifications, 
With  those  of  the  old  countries;  but  they  said  nothing  of 
this  industrial  loss  incurred  to  the  same  end. 

Furthermore,  is  it  not  a  satire  on  this  notion  to  remember 
that  the  only  wars  in  which  we  have  been  engaged  since 
1816,  have  been  that  with  Mexico  and  the  civil  war,  in 
neither  of  which  our  cherished  industrial  independence  was 
of  any  use  to  us  ? 

I  am  not  arguing  for  expenditures  on  armies  and  navies. 
Far  from  it.  We  are  happy  in  not  needing  them.  Any 
one  who  has  to  come  three  thousand  miles  to  fight  us  will 
think  well  of  it  first.  I  only  point  out  the  grotesque  con- 
trast  between  our  preparations  for  war  of  the  one  kind  and 
of  the  other. 

In  fact,  however,  the  independence  which  we  seek  must 
be  sought  in  another  direction.  Independent  men  are 
those  who  have  wealth,  not  those  whose  houses  are  stored 
for  a  siege.  Independent  nations  are  those  which  are 
wealthy,  because  they  can  command  what  they  want  when 
they  want  it.  Those  will  be  wealthiest  which  give  industry 
its  freest  course  in  time  of  peace. 

The  case  of  the  South  during  the  late  war  is  a  most 
striking  proof  of  the  fallacy  of  the  "independence'7  doc- 
trine. The  South  had  less  of  this  artificial  independence 
than  any  other  country  in  the  world.  It  was  blockaded  and 
inclosed  by  an  immensely  superior  force,  and  what  hap- 
pened? First,  people  found  that  when  they  had  put  their 
last  stake  on  war,  they  could  do  without  thousands  of  things 
which  had  seemed  essential;  second,  they  found  substitutes 
and  makeshifts  to  take  the  place  of  real  essentials;  third, 
they  found  that,  so  long  as  they  had  commodities  to  ex- 
15 


338  PROTECTION    IN    U.  S. SUMNER. 

change  which  the  rest  of  the  world  wanted,  no  power  could 
prevent  the  exchange  from  going  on.  It  does  not  become 
those  who  needed  four  years  to  subdue  the  South  to  argue 
that  it  was  weak  for  lack  of  industrial  independence.  In- 
deed, the  argument  is  incomplete  in  two  or  three  important 
points.  Suppose  that  the  South  had  not  been  weakened  by 
slavery;  suppose  that  it  had  been  an  independent  nation 
before  and  had  enjoyed  free  trade,  so  that  its  people  had 
possessed  all  the  wealth  they  might  have  accumulated;  sup- 
pose that  its  enemy  had  been  obliged  to  seek  it  over  the 
ocean,  and  by  sea  attack  only;  on  such  a  hypothesis  who  can 
believe  that  the  South  would  have  suffered  because  it  had 
not  "  enjoyed  protection,"  and  who  can  urge  us,  on  the 
chances  of  ever  finding  ourselves  in  the  position  of  the 
South,  to  go  on  creating  an  artificial  independence?  Our 
independence  lies  in  union,  good  government,  and  free 
industry. 

The  tariff  of  1816  was  not  carried  against  the  instincts  of 
the  American  people  towards  freedom  without  strong  oppo- 
sition. The  great  majority  adhered  to  the  old  Jeffersonian 
doctrines  and  policy.  They  wanted  to  get  rid  of  the  army 
and  navy,  to  reduce  taxes  and  expenditures,  to  reduce  the 
number  of  office-holders,  and  to  "let  things  alone."  The 
prevailing  argument  was  the  interest  of  the  existing  invest- 
ments, which,  of  course,  no  one  desired  to  destroy.  It  soon 
appeared,  however,  that  the  barrier  of  taxation  was  no 
equivalent  for  embargo  and  war. 

The  return  of  peace  in  Europe  allowed  industry  and 
finance  to  return  to  the  operations  of  natural  laws  and  to 
escape  from  the  constraints  of  twenty-five  years  of  war. 
The  shock  was  terrible,  and  it  took  ten  years  for  its  effects 
to  subside.  In  1816  the  English  exported  immense  quan. 
titles  of  manufactured  goods  to  the  Continent  and  to  the 
United  States.  The  results  of  these  transactions  were  dis- 
astrous. Our  paper  money  here  also  exercised  its  influence 


PROTECTION    IN    U.- S. — SUMNER.  339 

to  encourage  overtrading  and  overimportation.  In  1817 
the  manufacturers  were  in  distress.  Cries  were  heard 
against  the  inundations  of  foreign  goods,  against  the  drain 
of  specie  and  against  the  balance  of  trade.  Evidently  we 
cannot  understand  these  things  without  taking  into  account 
the  movements  which  were  going  on  in  the  other  industrial 
nations,  but  the  popular  opinion  here  was  that  the  English 
had  set  out,  by  a  sacrifice  of  some  millions'  worth  of  goods, 
to  destroy  American  manufactures.  This  belief  had  deep 
root  and  perhaps  has  only  lately  died  out,  since  we  have 
ceased  to  hear  cries  of  "  British  gold "  whenever  any  one 
spoke  of  free  trade.  The  notion  I  have  referred  to  received 
strong  reinforcement  from  a  remark  of  Brougham's  which 
you  may  find  quoted  in  the  first  popular  protectionist  work 
you  choose  to  take  up,  in  which  he  recommended  his 
countrymen  to  reconquer  the  American  market.  If  he 
meant  to  propose  to  them  to  sacrifice  their  capital  in  giving 
several  millions'  worth  of  goods  to  the  Americans  in  order 
to  destroy  factories  which  would  spring  up  again  the  moment 
they  tried  to  reimburse  themselves,  they  would  have  been 
the  first  to  laugh  at  him. 

An  eager  effort,  however,  in  favor  of  protection  was  now 
commenced,  and  it  was  kept  up  for  fifteen  years.  It  had 
an  organ  in  Niles*  Register,  the  editor  of  which  was  a  fanati- 
cal protectionist.*  He  filled  his  paper,  week  after  week,  with. 
essays,  items,  statistics,  and  arguments  in  favor  of  "home 
industry."  No  such  effort  has  ever  been  made  on  the  other 
side,  and  I  believe  that  one  can  understand  the  means  by 
which  the  natural  tendency  of  the  American  people  to  free- 
dom, and  their  early  bias  that  way,  was  perverted,  only  by 
observing  the  zeal  and  industry  with  which  protectionism 
was  inculcated. 

The  tariff  of  1816  had  provided  for  a  gradual  decline  of 
the  tax  on  cotton  and  woolen  goods,  and  Congress  had 
refused  to  include,  as  was  desired,  a  prohibition  of  nan- 


340  PROTECTION  'IN    U.  S. — SUMNER. 

keens,  but  the  time  at  which,  the  reduction  on  woolens  and 
cottons  was  to  take  place,  was  deferred  until  1826,  by  an 
Act  of  April  20,  1818,  and  the  duty  on  bar-iron  was  raised 
from  nine  to  fifteen  dollars  per  ton. 

The  tariff  of  1816  had  also  adopted  the  principle  of  the 
minimum  on  cotton  cloth  and  cotton  yarn,  none  of  the  for- 
mer being  rated  at  less  than  twenty-five  cents  per  square  yard, 
whatever  its  cost  at  the  place  of  exportation.  This,  of  course, 
cut  off  the  American  people  from  any  advantage  by  the 
great  factory  system  of  England,  or  from  the  introduction 
of  machinery  in  England,  so  far  as  these  improvements 
tended  to  cheapen  cotton  cloth.  It  ought  to  be  added  that 
the  incorrect  valuation  of  the  pound  sterling,  the  inaccuracy 
of  the  weights  and  measures  used  at  this  time,  and  the  long 
credit  given  by  the  government  for  duties,  to  some  extent 
neutralized  the  duties. 

In  1820  Mr.  Baldwin  of  Pittsburgh  introduced  three  bills, 
one  for  increased  duties,  one  for  taxes  on  auction  sales,  and 
one  for  cash  payment  of  duties,  which  all  failed  to  pass.  In 
1822  and  1823  other  bills  were  introduced  for  increasing 
duties,  which  failed  to  pass.  It  was  not  until  the  great 
presidential  struggle  of  1824  that  another  tariff  crowned  the 
seven  years'  struggle.  Before  taking  that  up  1  desire  to 
present  to  you  some  of  the  chief  doctrines  wThich  were 
believed  and  taught  at  this  time,  as  we  learn  them  from  the 
Congressional  debates  and  Niks'  Register. 

It  was  argued  that  wages  were  not  higher  here  than  in 
England  when  properly  measured.  This  was  in  answer  to 
the  free-trade  argument  as  then  put,  that  it  was  useless  to 
try  to  develop  manufactures  here  because  of  this  disadvant- 
age. Of  course,  if  it  is  true  that  wages  are  higher  here,  that 
would  be  the  true  inference. 

It  was  also  agreed  on  behalf  of  protection,  that  protection 
and  revenue  were  antagonistic  to  each  other,  and  that  the 
government  ought  to  be  supported  by  "direct"  taxation, 


PROTECTION    IN    U..S. SUMNER.  34j 

while  duties  on  imports  should  be  reserved  entirely  for  pur- 
poses of  protection.  Niles  published  long  articles  in  which 
he  urged  this  view  of  the  subject,  and  he  brought  forward 
many  and  strong  considerations  in  favor  of  what  he  called 
direct  taxation.  He  showed  what  the  tariff  really  cost  each 
consumer,  he  opposed  a  revenue  from  import  duties  as 
uncertain,  and  all  this  in  favor  of  prohibitory  duties  for  the 
purpose  of  protection. 

Another  feature  of  the  controversy  was  that  the  shipping 
interest  was  blamed  in  no  measured  terms  for  opposing  pro- 
tection to  manufactures.  The  growth  of  shipping  was 
pointed  out  and  traced  back  to  the  discriminating  and  tonnage 
duties  of  1789,  and  the  shipping  interest  was  charged  with 
selfishness  in  resisting  the  application  of  the  same  means  to 
other  industries.  In  this  connection  we  meet  with  the  best 
instance  of  the  fallacy  which  inheres  in  the  word  "  protec- 
tion "  itself.  In  making  up  the  account  against  the  shipping 
interest  for  the  protection  which  had  been  accorded  to  it,  the 
war  undertaken  for  its  defense,  but  against  its  will,  was 
charged  to  it,  and  also  the  entire  expense  of  the  navy.  The 
navy  "protected"  the  merchant  ships  from  unlawful  attacks 
or  interference,  that  is,  it  gave  them  the  security  which  it  is 
the  business  of  government  to  provide,  and  which  is  analo- 
gous to  the  office  of  courts  and  police  on  land,  but  this  pro- 
tection was  made  a  basis  of  argument  that  the  government 
ought  to  interfere  likewise  to  " protect"  producers  against 
industrial  competition. 

A  similar  charge  of  selfishness  was  brought  against  the 
cotton  manufacturers  of  New  England,  who,  after  1820, 
opposed  any  further  protection.  Their  industry  was  firmly 
established  and  very  remunerative,  and  they  found  that  the 
effect  of  protection  was  simply  to  disturb  their  business  by 
tempting  great  numbers  into  it,  and  by  exposing  it  to  great 
fluctuations.  It  was  argued  against  them  that  the  system 
ought  to  be  extended  to  wool  and  iron,  until  they  reached 


842  PROTECTION    IN    U.  S. — SUMNER. 

the  same  point.  This  is  logical  and  correct,  but,  as  has  often 
been  shown,  it  reduces  the  system  to  an  absurdity.  After 
taxing  the  community  to  foster  one  industry,  it  is  proposed 
to  tax  that  one  with  others,  to  foster  a  second,  then  all  the 
preceding  to  encourage  a  third.  It  follows  that  the  first 
and  second  lose  their  advantage,  and  that  the  result  is  a 
series  of  weak  fosterlings  supported  by  weakened  legitimate 
industries. 

The  same  criticism  applies  to  any  system  of  "  incidental 
protection."  The  claim  is  put  in  to  widen  the  system  and 
do  " justice"  by  favoring  all,  which  is  impossible.  The  only 
real  justice  is  to  favor  none. 

The  great  argument  of  this  period,  however,  was  "hard 
times."  There  was  a  commercial  crisis  in  1819,  which  has 
not,  perhaps,  been  equaled  since.  The  complaints  were 
kept  up  for  five  years,  although  the  only  ground  for  them, 
if  any,  was  the  comparison  with  the  flush  times  of  specula- 
tion and  paper  money,  and  they  were  just  such  times  of  dis- 
tress as  the  whole  commercial  world  was  enduring.  The 
complaints  ceased  when  the  tariff  of  1824  was  passed. 

Those  who  argued  most  strenuously  on  this  ground  found 
themselves  putting  propositions  together  which  made  a 
strange  combination  when  compared.  Thus:  (1.)  The  United 
States  is  the  richest  country  in  the  world  in  point  of  natural 
resources,  and  has  only  a  sparse  population.  (2.)  This 
favored  country  is  in  great  distress.  (3.)  "What  it  needs  is 
more  taxation  to  enable  its  people  to  get  a  living  in  it. 

We  not  unfrequently  find  arguments  used  during  this 
period  which  show  that  the  speakers  or  writers  believed  that 
a  girl  in  a  Manchester  factory,  who,  with  a  loom,  could  pro- 
duce as  much  cloth  as  several  men  could  make  by  hand  in  the 
same  time,  was  therefore  able  to  exchange  her  product  for 
the  product  of  the  labor  of  that  number  of  American  farm- 
ers. Of  course  all  the  notions  about  the  balance  of  trade, 
and  draining  specie,  and  making  money  scarce  are  met  with 
continually. 


PROTECTION   IN   U.  S. — SUMNER.  343 

The  duties  collected  under  the  tariff  of  1816,  during  the 
last  three  years  of  its  operation,  were  equal  to  a  rate  of  30 
per  cent,  on  dutiable  imports.  You  see  that  there  had  been 
great  progress  since  Hamilton's  day. 

I  come  now  to  the  tariff  of  1824.  That  act  would  not 
have  been  passed  if  it  had  not  been  for  the  political  contest 
which  was  impending.  Here  we  meet  with  the  new  factor  of 
political  intrigue,  and  also  with  those  phenomena  which 
arise  from  the  extension  and  complexity  of  the  system. 
This  bill  was  dexterously  combined  to  embrace  strength 
enough  to  carry  it.  We  also  now  find  the  South  opposed  to 
protection;  as  indeed  she  had  been  since  1820.  The  argu- 
ments employed  were  not  new,  but  the  issue  was  clearer  and 
the  debate  was  far  better  sustained  from  the  free-trade  side. 
We  have  an  argument  by  Mr.  Webster,  in  which  several  of 
the  issues  which  continually  arise  in  this  controversy  are 
handled  in  a  masterly  manner.  He  argued  them  on  a  plane 
entirely  above  the  wretched  patch- work  of  which  the  discus- 
sion otherwise  consisted.  I  have  already  quoted  his  crush- 
ing criticism  of  the  notion  of  protection  as  an  "American 
system,"  under  the  application  of  that  title  which  now 
became  current.  He  showed  the  advance  of  opinion  on  this 
matter  abroad,  and  showed  that  we  were  taking  on  our 
young  shoulders  a  load  which  the  older  nations  would  be 
glad  to  throw  off  if  they  were  not  clogged  by  so  many  vested 
interests.  He  also  showed  that  the  distress  complained  of,  so 
far  as  it  had  existed  in  the  last  few  years,  had  been  due  to 
currency  troubles  here  and  abroad,  and  gave  a  correct 
explanation,  which  few  seemed  able  to  understand,  of  the 
phenomena  of  the  exchanges  here  in  1820  and  1821.  In 
regard  to  the  comparative  rates  of  wages,  he  said:  The 
chairman  of  the  committee  says  "it  would  cost  the  nation 
nothing,  as  a  nation,  to  make  our  ore  into  iron.  Now  I 
think  it  would  cost  us  precisely  that  which  we  can  worst 
afford ;  that  is,  great  labor.  We  have  been  asked,  in  a  tone 


344  PROTECTION    IN    U.  S. SUMNER. 

of  some  pathos,  whether  we  will  allow  to  the  serfs  of  Russia 
and  Sweden  the  benefit  of  making  our  iron  for  us.  Let  me 
inform  the  gentleman  that  those  same  serfs  do  not  earn  more 
than  seven  cents  a  day,  and  that  they  work  in  these  mines 
for  that  compensation  because  they  are  serfs.  And,  let  me 
ask  the  gentleman  further,  whether  we  have  any  labor  in 
this  country  that  cannot  be  better  employed  than  in  a  busi- 
ness which  does  not  yield  the  laborer  more  than  seven  cents 
a  day  ?  The  true  reason  why  it  is  not  our  policy  to  compel 
our  citizens  to  manufacture  our  own  iron  is,  that  they  are  far 
better  employed.  It  is  an  unproductive  business,  and  they 
are  not  poor  enough  to  be  obliged  to  follow  it.  If  we  had 
more  of  poverty,  more  of  misery  and  something  of  servitude; 
if  we  had  an  ignorant,  idle,  starving  population,  we  might  set 
up  for  iron  makers  against  the  world.  The  freight  of  iron  has 
been  afforded  from  Sweden  to  the  United  States  as  low  as  eight 
dollars  per  ton.  This  is  not  more  than  the  price  of  fifty  miles' 
land  carriage.  Stockholm,  therefore,  for  the  purpose  of  this 
argument,  may  be  considered  as  within  fifty  miles  of  Phila- 
delphia. Now,  it  is  at  once  a  strong  and  just  view  of  this 
case,  to  consider  that  there  are,  within  fifty  miles  of  our 
market,  vast  multitudes  of  persons  who  are  willing  to  labor 
in  the  production  of  this  article  for  us  at  the  rate  of  seven 
cents  per  day,  while  we  have  no  labor  which  will  not  com- 
mand, upon  the  average,  at  least  five  or  six  times  that 
amount.  The  question  is  then,  Shall  we  buy  this  article  of 
these  manufacturers  and  suffer  our  own  labor  to  earn  its 
greater  reward,  or  shall  we  employ  our  own  labor  in  a  sim- 
ilar manufacture,  and  make  up  to  it,  by  a  tax  on  consumers, 
the  loss  which  it  must  necessarily  sustain  ?" 

Unfortunately,  Mr.  "Webster  was  bound  by  local  interests 
to  sustain  the  protection  to  shipping,  and  this  was  fatal  to 
his  opposition.  Massachusetts  wanted  protection  on  ships, 
but  not  on  hemp  or  iron  or  molasses.  A  small  Massachu- 
setts interest  joined  with  Rhode  Island  and  Connecticut  in 


PROTECTION    IN    U.  S. — SUMNER.  345 

favor  of  an  increased  tax  on  woolens,  but  not  on  wool.  The 
tariff  of  1816,  it  was  said,  had  not  sufficiently  protected 
woolens,  and  had  made  the  tax,  such  as  it  was,  diminish  at 
intervals.  The  English  bounty  on  exported  woolens  was  a 
damage  which,  it  was  claimed,  ought  to  be  counteracted. 
Observe  the  antagonism  here  established:  England,  pursu- 
ing the  old  restrictive  system  by  these  bounties,  made  a 
present  to  foreign  nations  at  the  expense  of  her  own  tax- 
payers. The  foreign  nations  regarded  this  gift  as  an  injury, 
and  set  up  barriers  against  its  acceptance,  at  the  expense  of 
their  tax-payers.  Could  anything  more  conclusively  con- 
demn the  whole  system? 

Then  look  at  the  internal  conflict  of  interest.  Kentucky 
wanted  a  tax  on  hemp  to  encourage  her  production,  although 
her  dew-rotted  hemp  was  so  inferior  to  the  Russian  water- 
rotted  hemp  that  it  never  competed.  She  also  wanted  a  tax 
on  molasses  to  make  rum  dear  in  the  interest  of  whisky. 
Louisiana  wanted  a  tax  on  molasses  for  protection  to  her 
sugar  planters.  The  Middle  States  and  Ohio  wanted  pro- 
tection on  raw  wool;  and  Pennsylvania,  of  course,  wanted 
protection  on  iron.  In  the  conflict  of  interests  New  Eng- 
land was  defeated,  having  less  political  power,  and  hemp, 
whisky,  iron,  and  raw  wool,  uniting  the  Middle  and  West- 
ern States,  carried  the  day.  The  minimum  on  cottons  was 
raised  to  30  cents.  A  minimum  for  woolens  was  established 
at  33^  cents,  and  the  duty  was  put  at  30  per  cent,  to  be 
advanced  to  33|-  per  cent,  in  a  year.  Raw  wool,  costing 
less  than  10  cents  per  pound,  was  to  pay  15  per  cent.  Other 
wool  was  to  pay  20  per  cent,  f'or  a  year,  25  per  cent,  the 
second  year,  and  30  per  cent,  afterwards.  Bar-iron  was 
raised  to  $18  per  ton  if  forged,  and  stood  at  $30  if  rolled. 
This  was  to  off-set  the  cheapness  of  the  new  process  chiefly 
used  in  England. 

This  tariff  passed  the  House  by  107  to   102.     New  Eng- 
land gave  fifteen  votes  for  it,  and  twenty-three  against  it 


346  PROTECTION    IN    U.  S. — SUMNEB. 

The  Southern  and  Southwestern  States  gave  two  votas  for 
it.  The  duties  collected  under  it  were,  on  an  average,  equal 
to  a  rate  of  thirty-seven  per  cent. 

One  expects  now,  in  reading  the  contemporaneous  records, 
to  be  rid  of  the  subject  for  a  time.  The  reader  naturally 
says:  u  The  tariff  has  been  raised;  the  protection  has  been 
granted.  The  question  is  disposed  of."  Nothing  of  this 
kind,  however,  took  place.  The  high-tariff  interest  was  by 
no  means  satisfied  with  the  result,  especially  as  regarded 
woolens.  The  agitation  recommenced  the  next  year,  with  a 
reiteration,  of  the  old  arguments,  condemnation  of  "our 
present  ruinous  system,"  and  demand  for  protection,  as  if 
there  had  been  no  concessions  in  that  direction.  This  calls 
our  attention  to  certain  features  inherent  in  the  protective 
system,  and  shows  us  how  erroneous  in  practice,  as  well  as 
in  theory,  is  the  notion  that  we  can  proceed  through  pro- 
tection to  free  trade.  Protection  nourishes  dependence,  not 
independence.  It  is  a  system  in  which  all  the  parts  hang 
together,  and  protection  for  some  cannot  be  united  with 
freedom  for  others.  If  one  industry  should  be  set  out  in 
free  competition,  while  the  rest  were  protected,  it  would  be 
found  that  they  are  interdependent;  that  machinery,  raw 
materials,  and  labor  supplies  would  be  so  dear  that  the 
exposed  industry  would  have  no  fair  chance  in  competition 
with  foreigners.  Hence  one  long  protected  industry,  if  it 
became  independent  by  natural  causes,  could  not  be  left  free 
unless  the  whole  system  were  abandoned.  But  then  the  cry 
goes  up  from  those  nurslings  of  recent  beginning,  that  they 
are  not  yet  ready.  If  you»defer  the  introduction  of  freedom 
for  ten  years  longer  on  their  account,  a  new  company  of 
infants  is  meantime  brought  into  being,  and  the  plea  for 
further  delay  comes  from  them.  Thus  you  go  on  forever, 
and  the  theory  is  reduced  to  an  absurdity. 

During  the  period  from  1824  to  1828  the  political  factor 
in  the  tariff  controversy  rose  to  chief  importance.  The 


PROTECTION   IN    U.  S. — SUMNER.  347 

administration  of  J.  Q.  Adams  was  exposed  to  the  most 
vigorous  and  relentless  opposition  from  the  party  which  had 
formed  around  Andrew  Jackson.  After  the  Democratic 
Convention  of  Harrisburg,  in  1824,  it  was  certain  that 
Pennsylvania  was  enthusiastic  for  Jackson.  The  rural 
population  of  that  State  cared  more  for  Jackson  than  for 
tariff.  This  was  a  fact  which  the  politicians  had  simply  to 
accept  as  a  fact.  The  composition  of  the  Jackson  party, 
therefore,  coincided  to  a  certain  extent  with  the  coalition 
which  had  passed  the  tariff  of  1 824.  New  England  as  the 
Adams  section  was,  both  politically  and  on  the  tariff,  still 
more  in  a  position  to  be  neglected  than  it  was  in  1847. 
The  South  found  its  political  combinations  and  its  tariff 
interests  inconsistent. 

England  still  furnished  a  convenient  and  popular  object 
of  attack.  She  now  showed  her  perfidy  and  desire  to  ruin 
American  manufactures  by  reducing  her  own  duties  on  raw 
wool  to  one  penny  per  pound.  This  enabled  her  manufac- 
turers to  manufacture  so  cheaply  as  to  pay  our  import  duties 
and  yet  compete  with  success.  According  to  the  theory 
which  we  are  studying,  this  was  a  serious  reason  for  "  pro- 
tecting "  ourselves  against  the  good  this  might  have  brought 
to  us.  The  woolen  manufacturers  of  Boston  accordingly 
sent  a  petition  to  Congress  in  1826  asking  for  more  protec- 
tion. January  10,  1827,  a  bill  was  introduced  for  raising 
the  duties  on  wool  and  woolens.  It  was  tabled  in  the 
Seriate  by  the  casting  vote  of  Calhoun.  It  was  in  the  New 
England  interest,  and,  as  Niles  said,  politics  were  in  the  way. 

In  July,  1827,  a  national  convention  met  at  Harrisburg, 
called  by  the  Pennsylvania  Society  for  the  Promotion  of 
Manufactures  and  Mechanic  Acts  to  consider  measures  for 
promoting  manufactures.  It  was  the  most  energetic  attempt 
ever  made  to  organize  and  give  symmetry  to  the  protectionist 
movement.  It  adopted  resolutions  in  favor  of  more  protec- 
tion for  iron,  steel,  glass,  wool,  woolens,  and  hemp.  It  pro- 


348  PROTECTION    IN    U.  S. — SUMNER. 

posed  a  duty  of  20  cents  a  pound  on  wool  costing  8  cents 
or  more,  to  advance  2^  cents  per  annum  until  it  should  be 
50  cents.  It  adopted  four  minima  for  woolens,  50  cents, 
$2.50,  $4.00,  $6.00.  The  duty  was  to  be  40  per  cent,  for  a 
year,  45  per  cent,  the  next  year,  and  50  per  cent,  afterwards. 

The  committee  on  manufactures  at  the  next  session  of 
Congress  recommended  that  evidence  should  be  taken  as  to 
the  state  of  manufactures.  This  was  a  new  departure,  for 
hitherto  all  tariff  legislation  had  been  made  blindly  and 
ignorantly.  The  northern  protectionists  opposed  the  propo- 
sition ;  the  South  favored  and  carried  it.  The  evidence 
all  went  to  show  deplorable  distress  in  all  manufacturing 
industry,  although  the  country  generally  was  enjoying  great 
prosperity.  The  argument  necessarily  was  tangled  and 
contradictory.  It  was  urged,  and  really  was  the  greatest 
popular  argument,  that  the  country  owed  its  prosperity  to 
the  tariff,  but  here  were  the  manufacturers  claiming  to  be 
in  distress.  The  truth  was  that  the  country  possessed '  such 
means  of  producing  wealth  that  the  tariff  could  not  crush 
them.  Then  again  the  distress  was  needed  as  an  argument 
for  more  protection,  but  what  light  did  it  throw  back  on  the 
previous  attempts  in  that  direction  ? 

Many  of  the  peculiar  doctrines  I  have  mentioned  as 
advocated  at  an  earlier  period  were  now  heard  no  longer, 
but  a  new  one  was  brought  forward  and  repeated  again  and 
again,  viz. :  That  protection,  by  domestic  competition,  lowers 
prices.  I  have  already,  in  my  former  lecture,  discussed  this 
doctrine. 

The  new  tariff  bill  was  introduced  in  February,  1828. 
It  was  based  upon  the  recommendations  of  the  Harrisburg 
convention.  Its  central  feature  was  wool  and  woolens. 
Hemp,  iron,  and  molasses  figured  as  before.  It  came  for- 
ward, therefore,  as  a  New  England  or  Adams  measure,  and 
the  Jackson  coalition  opposed  it,  but  under  the  necessity  of 
satisfying  the  Middle  and  "Western  States.  The  feeling  in 


PROTECTION   IN    U.  S.—  SUMNEU.  349 

the  South  was  already  very  bitter  about  the  tariff  legislation, 
and  this  new  effort  to  push  on  the  system,  reckless  of  South- 
ern protests,  still  further  embittered  the  South.  The  "West 
also  took  the  position  that  they  had  as  yet  had  nothing  of 
this  good,  which  it  was  assumed  that  the  government  had  to 
distribute,  and  they  demanded  that,  if  the  system  was  to  go 
on,  they  should  have  their  share.  Mr.  Webster  took  the 
position  for*  Massachusetts,  that  «he  had  been  forced  into 
manufactures  by  the  policy  adopted  in  1824,  in  spite  of  her 
protests,  and  she  now  protested  that  the  investments  into 
which  she  had  been  drawn  should  not  be  sacrificed. 

You  look  in  vain  through  the  discussion  of  this  bill  for 
any  broad  principles.  Much  was  said  indeed  about  a  national 
policy ;  but  it  all  referred  to  this  system  which,  at  the  first 
approach  to  actual  discussion,  resolved  itself  into  political 
intrigue,  a  strife  of  sections,  and  a  struggle  between  "inter- 
ests." Much  was  said  about  broad  principles,  but  all  referred 
to  the  notion  that  by  robbing  all  for  the  benefit  of  the  few 
it  was  possible  in  some  way,  which  never  was  explained,  to 
gain  great  benefit  to  all.  The  South  adopted  the  policy  of 
trying  to  make  the  bill  as  bad  as  possible.  They  proposed 
and  advocated  absurd  and  extravagant  exaggerations,  in  the 
hope,  apparently,  that  they  could  thus  make  apparent  to  the 
protectionists  the  enormity  of  their  propositions  and  the 
absurdity  of  their  demands.  This  policy  did  not  work. 
The  belief  in  the  great  protectionist  dogmas  had  now  become 
strong.  Political  exigencies  were  great,  and  the  Northern 
protectionists  either  rejected  the  exaggerated  propositions, 
or  accepted  them  in  good  faith.  This  tariff  came  to  be 
known  as  the  "  tariff  of  abominations, "  but  its  worst  abomi- 
nations were  forced  into  it  by  the  perverse  policy  of  the 
Southern  men.  What  it  concerns  us  to  observe  is,  the  evil 
effects  of  mixing  up  politics  and  President-making  with  fiscal 
legislation,  and  the  exaggerations  to  which  the  protective 
system  leads. 


350  PROTECTION    IN    U.    S. — SUMNER. 

The  result  of  this  struggle  was  that  the  tax  on  molasses 
was  raised  to  10  cents  per  gallon.  The  tax  on  wool  was 
put  at  4  cents  per  pound  and  40  per  cent.,  to  increase  by 
5  per  cent,  annually  until  it  was  50  per  cent.  A  $1.00 
minimum  was  inserted  in  the  scheme  proposed  at  Harris- 
burg,  and  a  tax  of  40  cents  a  square  yard  was  laid.  This 
combination  of  taxes,  resulting  from  political  motives  only, 
to  favor  the  wool  growers  of  the  Middle  and  Ohio  States 
and  not  to  make  woolens  dear  to  consumers  in  the  same 
districts  and  in  the  South,  was  exceedingly  injurious  to 
woolen  manufacturers.  You  observe  that  it  is  not  in  human 
ingenuity  to  interpose  in  the  delicate  relations  of  trade  by 
arbitrary  enactments  without  doing  damage.  On  account  of 
these  features  of  the  tariff  in  regard  to  molasses  and  woolens 
it  got  only  sixteen  votes  from  New  England  (in  the  House) 
to  twenty-three  against  it. 

The  tax  on  bar-iron,  not  rolled,  was  raised  to  $22.40  per 
ton;  if  rolled,  $37  per  ton.  Hemp  was  raised  to  $45  per  ton. 
These  features,  with  the  tax  on  wool,  gained  the  force  which 
carried  the  bill  in  the  House,  105  to  94.  On  the  final  vote 
there  were  in  the  affirmative  sixty-one  Adams  and  forty-four 
Jackson  votes;  in  the  negative,  thirty-five  Adams  and  fifty-nine 
Jackson  votes.  The  South,  after  putting  the  "  abominations  " 
in  the  bill,  voted  against  it,  except  three  votes.  To  show  the 
want  of  good  faith,  it  is  significant  to  notice  that  on  the 
motion  for  the  previous  question  eleven  Adams  and  ninety- 
nine  Jackson  men  voted  in  the  affirmative,  and  eighty 
Adams  and  eleven  Jackson  men  in  the  negative. 

All  the  New  England  men  and  all  the  lona  fide  tariff  men 
like  Niles  were  dissatisfied  with  this  bill,  and  began  at  once 
to  agitate  for  its  amendment.  It  has  been  customary  for  the 
tariff  advocates  to  speak  of  it  as  a  good  bill,  which  only 
needed  some  slight  " adjustments."  We  see,  I  think,  if  we 
look  at  it  candidly,  the  very  best  proof  that  such  adjustments 
«are  required  forever,  that  is,  that  they  are  impossible.  It  is 


PROTECTION   IN    U.    S. — SUMNER.  351 

a  specimen  of  the  purest  quackery  in  legislation.  I  think  it 
shows  also  that  the  only  petition  any  sober  business  man  can 
ever  address  to  the  Legislature  is  to  Met  him  alone"  and,  if 
possible,  not  legislate  about  his  affairs  at  all.  In  this  very 
debate  of  1828,  Mr.  Stevenson  of  Pennsylvania,  arguing  for 
the  tariff,  said:  "If  legislation  were  as  intelligent  as  com- 
merce is  vigilant,  much  national  evil  might  be  avoided."  I 
could  only  improve  this  by  saying :  "If  it  were  perceived 
that  legislation  never  can  be  as  intelligent  as  commerce  is 
vigilant,  far  more  national  evil  would  be  avoided." 

The  agitation  of  the  Northern  protectionists  for  the  amend- 
ment of  the  tariff  sank  into  insignificance  in  comparison  with 
the  discontent  which  the  tariff  caused  in  the  South.  The 
South  was,  of  course,  crippled  by  slavery,  but  it  is  undeniable 
that  the  complaint  the  Southerners  made  was  just  and  well 
founded.  They  sold  in  a  free  market  and  bought  in  a  pro- 
tected one.  They  claimed  that  they  had  inherited  the 
grievances  of  the  Colonies  at  the  revolution,  and  that  they 
stood  just  where  the  Colonists  had  stood  at  that  time;  asking 
why  they  should  maintain  a  political  connection  in  which  the 
taxing  power  was  abused  for  their  oppression.  When  they 
were  told  that  they  must  yield  to  the  welfare  of  the  whole,  they 
replied  that  this  was  England's  old  argument,  that  the  Colo- 
nies should  bow  to  imperial  considerations.  Thus  the  tariff 
controversy,  pushed  to  extremes  by  the  power  of  the  major- 
ity, and  in  disregard  of  the  pleas  of  the  minority  for  justice, 
assailed  our  political  system  in  its  most  delicate  and  most 
vital  part — the  integrity  of  the  confederation.  The  attempt 
of  South  Carolina  to  nullify  the  tariff  act  was  not  open  dis- 
union and  secession.  It  was  worse.  It  was  an  attempt  to 
remain  in  the  Union  and  yet  reduce  the  confederation  to 
imbecility  and  contempt.  Thus  forty  years  after  the  first 
tariff  with  its  8  per  cent,  import  on  dutiable,  we  find  that 
the  system  had  steadily  advanced,  that  the  infant  industries 
were  as  feeble  and  clamorous  as  ever,  that  the  burden  had 


352  PROTECTION    IN    U.    S. — SUMNER. 

been  increased  until  it  was  now  equal  to  41  per  cent.,  that  it 
had  been  elaborated  into  a  system  in  which  the  lobby  had 
been  trained  and  educated,  that  it  had  corrupted  politics  and 
furnished  capital  for  political  schemes,  that  it  had,  on  the 
testimony  of  those  interested,  done  them  no  good,  and  that  it 
had  brought  the  confederation  face  to  face  with  its  greatest 
danger,  that  of  disruption. 


CHAPTER  XX. 

TARIFF  COMMISSION.* 
BY  HON.  SAMUEL   J.  RANDALL  OF  PENNSYLVANIA. 


MR.  CHAIRMAN :  It  is  my  purpose  in  this  debate  to  be 
as  brief  and  practical  in  the  expression  of  my  views 
as  possible,  preferring,  for  obvious  reasons,  the  postponement 
of  all  general  discussion  of  details  of  necessary  legislation 
until  the  revision  of  the  present  tariff  shall  be  directly  under 
consideration.  It  is  a  subject  at  all  times  and  in  every 
country  full  of  difficulty  and  embarrassment,  and  yet  it  is  as 
old  as  government  itself,  and  has  exhausted,  as  we  know,  the 
highest  mental  efforts  of  the  most  celebrated  statesmen. 
Some  few  points  have  been  settled  and  accepted  generally, 
but  they  are  not  many.  Hallam,  the  justly  esteemed  consti- 
tutional historian,  in  his  "  Europe  During  the  Middle  Ages," 
lays  down  this  axiom,  which  our  experience  as  a  people  jus- 
tifies,  and  which  will  not  be  disputed : 

"It  is  difficult  to  name  a  limit  beyond  which  taxes  will 
not  be  borne  without  impatience  when  they  appear  to  be 
called  for  by  necessity  and  faithfully  applied;  nor  is  it 
impracticable  for  a  skillful  minister  to  deceive  the  people  in 
both  thpse  respects.  But  the  sting  of  taxation  is  wasteful- 
ness. What  high-spirited  man  could  see  without  indignation 
the  earnings  of  his  labor,  yielded  ungrudgingly  to  the  public 
defense,  become  the  spoil  of  parasites  and  peculators  ?  It  is 
this  that  mortifies  the  liberal  hand  of  public  spirit:  and 

*  Speech  in  the  House  of  Representatives,  May  5,  1882. 

(353) 


354  TARIFF    COMMISSION — RANDALL. 

those  statesmen  who  deem  the  security  of  government  to 
depend  not  on  laws  and  armies,  but  on  the  moral  sympathies 
and  prejudices  of  the  people,  will  vigilantly  guard  against 
even  the  suspicion  of  prodigality." 

It  is  equally  true  that  excessive  taxation,  even  when  it  is 
successful  in  securing  excessive  revenue,  is  ultimately 
destructive  of  the  sources  of  labor  from  which  it  is  drawn; 
while  at  the  same  time  it  engenders  extravagance,  corruption, 
and  decay.  For  when  the  government  sets  the  example  of 
extravagance,  it  is  soon  followed  in  every  walk  of  life,  and 
one  does  not  need  to  be  a  prophet  to  foretell  the  general  ruin 
which  must  inevitably  result.  Frugality  and  economy  never 
destroyed  any  government,  while  they  have  built  up  the 
most  powerful  empires  the  world  has  ever  witnessed. 

So  much  for  general  statement.  Revenue  laws  have  been 
a  subject  of  discussion,  agitation,  and  anxiety  from  the  earli- 
est days  of  our  political  history.  Indeed,  Sabine,  in  his 
"  Loyalists  of  the  American  Revolution,"  states  positively 
his  conviction,  after  careful  study  of  documentary  history 
and  State  papers,  that  they  "  teach  nothing  more  clearly  than 
this,  namely,  that  almost  every  matter  brought  into  discus- 
sion was  practical,  and  in  some  form  or  other  related  to  labor, 
to  some  branch  of  common  industry."  He  states  further  on 
there  were  no  less  than  twenty -nine  laws  which  restricted 
and  bound  down  Colonial  industry. 

The  manner  of  raising  the  necessary  revenue  for  the  sup- 
port of  the  Government  has  been,  as  I  have  said,  at  all  times 
in  the  United  States  the  cause  of  irritation  to  the  people. 
And  we  need  not  be  surprised  at  this  when  we  consider  the 
vast  extent  of  our  domain,  and  the  almost  endless  diversity 
of  productions  of  the  soil,  and  of  manufactures,  and  every 
other  branch  of  human  industry. 

The  existing  overflowing  Treasury  brings  a  demand  for 
reduction  of  the  tariff  and  internal-revenue  taxes.  In  my 
opinion,  in  such  a  condition  of  our  finances,  reduction  of  tax- 


TARIFF    COMMISSION — RANDALL.  355 

ation  should  at  once  begin.  Unnecessary  taxation  is  injuri- 
ous to  the  interests  of  the  people  in  many  directions.  Gov- 
ernment has  no  justification  for  the  collection  of  burdensome 
taxes  in  excess  of  the  sum  requisite  for  the  support  of  its 
proper  administration.  What  have  we  seen  in  this  Congress? 
The  excess  of  our  resources  has  induced  the  presentation  of 
every  conceivable  scheme  to  deplete  the  Treasury,  and  our 
expenditures,  unless  checked  in  time,  will  reach  enormous 
proportions  and  bring  back  again,  as  prior  to  1874,  a  satur- 
nalia of  extravagance  and  disgrace. 

In  the  matter  of  taxation  we  are  acting  under  a  written 
Constitution.  u  Congress  shall  have  power  to  lay  and  collect 
taxes,  duties,  imposts,  and  excises,  to  pay  the  debts  and  pro- 
vide for  the  common  defense  and  general  welfare  of  the 
United  States.'1  I  need  not  enlarge  upon  our  traditional 
history  in  this  regard,  and  it  will  be  accepted  as  true  that 
only  at  periods  of  great  necessity  and  urgency  have  excise  or 
internal  taxes  been  resorted  to.  Our  present  internal-revenue 
system  grew  up  out  of  the  necessities  of  war,  and  when 
those  necessities  cease  that  taxation  should  disappear.  When 
the  framers  of  the  Constitution  granted  the  power  to  impose 
excise  duties  it  was  a  point  of  serious  dispute  and  was  agreed 
to,  finally,  only  as  a  resort  incase  the  Government  should  be 
involved  in  war,  and  not  to  be  exercised  as  a  permanent 
mode  of  raising  revenue. 

I  will  not  enlarge  upon  this;  I  believe  it  to  be  incontro- 
vertible, however  men  may  change  sides  because  of  other 
considerations  affecting  other  questions;  and  I  do  not  forget 
that  Thomas  Jefferson,  the  author  of  the  Declaration  of 
Independence  and  the  founder  of  the  Democratic  party, 
brought  about  the  repeal  of  internal  or  excise  taxes  as  one  of 
the  very  first  acts  of  his  administration  as  President  of  the 
United  States. 

I  favor,  therefore,  as  speedily  as  possible,  a  total  abolition 
of  our  internal-revenue  system,  and  I  am  ready  to  join 


856  TARIFF    COMMISSION — RANDALL. 

hands  with  any  and  all  in  this  House  in  favor  of  an  equali- 
zation of  our  duties  on  imports.  No  one  who  understands 
the  existing  tariff  laws  will  deny  the  justice  and  necessity 
of  revision.  The  present  duties  were  for  the  most  part 
levied  during  war  and  for  the  purpose  of  raising  a  large 
war  revenue.  It  will  suffice  in  this  connection  to  quote  the 
Industrial  League  as  unanswerable  in  this  regard,  as  it  is  an 
admission  on  the  part  of  those  who  favor  the  highest  pro. 
tective  duties: 

"They  consider  such  revision  desirable  for  the  interests 
both  of  the  industries  affected  and  those  of  consumers, 
partly  on  account  of  some  original  imperfections  in  the 
present  tariff,  and  partly  on  account  of  the  modifications 
which  are  demanded  by  the  changes  which  have  occurred 
in  conditions  of  production  and  commerce." 

There  should  be,  however,  no  vicious  assaults  on  these 
laws.  Changes  should  have  firm  foundation  in  reason,  and 
especially  should  we  avoid  mere  experiment  and  purely 
speculative  efforts  on  this  vital  subject.  Our  excess  of 
revenue  now  approaches  in  amount  the  annual  receipts  from 
internal  or  excise  taxes.  If  proper  economy  be  exercised 
in  expenditures  they  can  be  brought  within  the  limits  of  our 
ordinary  resources  of  taxation,  enabling  us  without  jar  or 
friction  to  repeal  internal-tax  laws,  which  are  inquisitorial 
and  offensive  in  the  highest  degree.  These  taxes  reach 
vexatiously  every  citizen  in  his  business,  in  his  household, 
and  in  the  affairs  of  every-day  life  until  they  have  become 
almost  unendurable.  There  is  no  longer  an  excuse,  in  my 
opinion,  for  their  continuance. 

The  objection  to  direct  taxes  is  equally  as  strong  to  inter- 
nal taxes;  and  either  or  both  are  justified  only  by  stern 
necessity.  They  are  irritating  and  dangerous,  and  internal- 
revenue  taxes  entail  upon  us  the  keeping  up,  as  at  present, 
somewhere  near  five  thousand  officers  engaged  in  their  col- 
lection, distributed  in  every  county  of  every  State,  tainting, 


TARIFF   COMMISSION — RANDALL.  357 


as  we  know,  the  source  of  all  power  in  this  Republic,  the 
elections  by  the  people.  Who  favors  direct  tax?  No  one; 
and  if  the  internal  taxes  were  not  now  imposed  by  law,  is 
there  a  man  who  would  risk  his  political  future  by  asking 
that  the  system  should  be  put  into  operation?  I  sincerely 
believe  that  there  is  not  a  man. 

I  did  hope  when  this  Congress  assembled  that  before 
the  adjournment  of  this  session  a  very  large  reduction  of 
internal  taxation  would  have  resulted  from  our  labors.  The 
Committee  on  Ways  and  Means  seemed  to  favor  a  reduction 
of  $70,000,000,  but  the  fiat  of  a.  Republican  Congressional 
caucus  overruled  that  good  intent.  Thus  the  majority  of 
the  Representatives  in  this  House  of  one  political  party,  and 
of  a  party  representing  a  doubtful  majority  of  the  people 
even  at  the  time  of  its  election,  regulates  the  current  of 
remedial  legislation,  and  in  this  instance  on  a  subject  which 
should  be  non-partisan.  Thus  the  opportunity  of  relieving 
our  tax-annoyed  and  tax -burdened  constituents  may  be  lost. 

The  reduction  as  now  recommended  by  the  Committee  on 
Ways  and  Means  reaches  in  great  part  those  most  able  to 
pay,  leaving  the  great  body  of  consumers  without  relief. 
How  long  the  latter  will  permit  this  state  of  things  to  con- 
tinue will  probably  be  determined  at  our  next  Congressional 
elections.  With  the  repeal  of  internal  or  excise  taxes  will 
come  a  resort  exclusively  to  duties  on  imports  as  the  main 
supply  of  our  resources,  and  I  maintain  if  our  expenditures 
be  kept  within  just  and  reasonable  bounds  we  can  from  this 
source  derive  adequate  revenue  for  the  administration  of 
the  Government  in  all  its  constitutional  and  legitimate 
functions. 

The  estimates  for  the  fiscal  year  ending  June  30,  1883,  of 
the  amount  to  be  raised  from  duties  on  imports  is  $217,000,- 
000,  and  from  all  other  sources,  leaving  out  internal  taxes, 
$30,000,000;  so  that  the  total  abolition  of  excise  taxes 
would  still  leave  to  the  Government  in  the  neighborhood  of 
$250,000,000. 


358  TARIFF   COMMISSION — RANDALL. 

It  must  be  recollected, .  however,  that  while  our  current 
annual  payment  of  interest  on  the  public  debt  has  been 
reduced  to  $61,000,000  (and  it  will  continue  to  decrease), 
yet  there  will  be  a  greater  increase  in  liabilities  on  account 
of  pensions.  Taking  the  years  ending  June  30,  1877  and 
1878,  as  a  criterion,  this  amount  of  receipts  would  still,  with 
prudence  and  frugality,  leave  a  sufficient  revenue.  Let 
me  recapitulate:  the  net  ordinary  expenditures  for  year 
ending  June  30,  1877,  $144,209,963.28;  the  net  ordinary 
expenditures  for  year  ending  June  30,  1878,  $134,463,452.15. 
In  the  latter  year  no  appropriations  were  made  for  rivers 
and  harbors.  The  amount  of  appropriations  for  these 
objects  for  the  former  year  was  about  $5,000,000,  so  that 
a  fair  average  of  the  net  ordinary  expenses  based  on  these 
two  years  would  be  $142,000,000.  Let  us  to  this  amount 
add  on  account  of  interest  $61,000,000,  and  for  sinking 
fund  about  $45,000,000  per  annum,  a  sum  which  I  deem 
sufficient  in  amount  each  year  toward  liquidation  of  the 
aggregate  amount  of  the  debt,  and  we  have  a  gross  sum 
of  expenditure  of  $248,000,000. 

There  will  equitably  stand  to  the  credit  of  the  sinking 
fund  for  the  year  ending  June  30,  1883,  taking  the  bonds 
already  called  for  payment  up  to  July  1,  1882,  $40,423,700. 
The  sinking  fund  for  the  current  fiscal  year  and  arrearages 
for  prior  years  were  fully  provided  for  by  call  which 
matured  March  13th  last,  and  prior  to  that  date.  The  bonds 
in  call  maturing  from  that  date  to  June  30th  next,  are  not 
applied  to  the  sinking  fund,  because  it  is  full.  While  the 
bonds  included  in  calls  maturing  from  March  13th  to  June 
30th,  being  calls  one  hundred  and  eight  to  one  hundred 
and  twelve  and  part  of  the  one  hundred  and  seventh,  amount- 
ing to  $40,423,700,  are  not  applied  to  the  sinking  fund,  yet 
as  arrearages  have  been  in  the  years  past  continued  to  be 
counted  on  book  accounts  there  is  no  reason  why  the  pay- 
ment of  our  bonds  in  excess  of  the  legal  requirements  of 


TARIFF    COMMISSION— RANDALL.  359 

the  sinking  fund  should  not  equitably  be  credited,  thus 
protecting  us  against  a  deficiency  in  the  event  that  the 
internal  taxes  are  largely  reduced  or  altogether  abolished. 

The  amount  which  is  required  by  law  to  be  placed  to  the 
credit  of  the  sinking  fund  for  the  year  ending  June  30,  1883, 
is  $45,122,110.80.  By  reason  of  the  payments  already 
made  there  is,  therefore,  due  only  an  equitable  balance  of 
$4,698,410.80  to  be  credited  to  sinking  fund  for  the  year 
1883,  with  period  of  time  from  July  1,  1882,  to  June  30, 
1883 — an  entire  year. 

In  my  opinion  $75,000,000  of  payment  on  account  of  cur- 
rent pensions  and  arrears  is  as  much  each  year  as  can  be 
safely  made  with  due  protection  against  fraud.  Until  the 
arrears  are  all  paid — say  $45,000,000  per  year  in  addition  to 
appropriations  of  years  18  77-'  78 — we  might  be  required  to 
continue  the  tax  on  whisky,  say  at  fifty  cents  per  gallon,  or 
we  could  encroach  upon  and  reduce  our  now  excessive 
unemployed  balance  in  the  treasury.  Admitting  there 
might  be  a  moderate  deficiency,  we  have,  to  meet  such  defi- 
ciency, now  in  the  Treasury  $136,000,000  above  and  beyond 
every  claim  on  the  Government  dollar  for  dollar. 

It  is  thus  made  plain  that,  with  economical  expenditures 
and  reduced  appropriations  for  the  year,  we  are  fully  pro- 
vided. 

As  I  have  already  said,  a  heavy  reduction  or  the  abolition 
of  internal  taxes  would  compel  immediate  revision  of  our 
tariff  laws.  How  that  can  be  done  with  most  expedition  is 
the  question  which  most  directly  concerns  us. 

I  do  not  favor  a  tariff  enacted  upon  the  ground  of  protec- 
tion simply  for  the  sake  of  protection,  because  I  doubt  the 
existence  of  any  constitutional  warrant  for  any  such  con- 
struction or  the  grant  of  any  such  power.  It  would  mani- 
festly be  in  the  nature  of  class  legislation,  and  to  such 
legislation,  favoring  one  class  at  the  expense  of  any  other,  I 
have  always  been  opposed. 


360  TARIFF    COMMISSION — RANDALL. 

In  my  judgment  the  question  of  free  trade  will  not  arise 
practically  in  this  country  during  our  lives,  if  ever,  so  long 
as  we  continue  to  raise  revenue  by  duties  on  imports,  and 
therefore  the  discussion  of  that  principle  is  an  absolute  waste 
of  time.  After  our  public  debt  is  paid  in  full  our  expendi- 
tures can  hardly  be  much  below  $200,000,000,  and  if  this  is 
levied  in  a  business-like  and  intelligent  manner  it  will  afford 
adequate  protection  to  every  industrial  interest  in  the  United 
States.  The  assertion  that  the  Constitution  permits  the 
levying  of  duties  in  favor  of  protection  "  for  the  sake  of 
protection  "  is  equally  uncalled  for  and  unnecessary.  Both 
are  alike  delusory  and  not  involved  in  any  practical  adminis- 
trative policy.  If  brought  to  the  test,  I  believe  neither  would 
stand  for  a  day.  Protection  for  the  sake  of  protection  is 
prohibition  pure  and  simple  of  importation,  and  if  there  be 
no  importation  there  will  be  no  duties  collected,  and  conse- 
quently no  revenue,  leaving  the  necessary  expenses  of  the 
Government  to  be  collected  by  direct  taxes — for  internal 
taxes  would  interfere  with  the  protective  principle,  and  when 
the  people  were  generally  asked  to  bear  the  burden  of  heavy 
taxation  to  sustain  class  legislation,  and  the  interests  of  a 
portion  of  our  people  at  the  expense  of  the  great  bulk  of 
our  population,  there  would  be  an  emphatic  and  conclusive 
negative.  So,  too,  with  free  trade,  there  is  hardly  a  man  in 
public  life  who  advocates  it  pure  and  simple.  Nobody  wants 
direct  taxation,  although  it  would  bring  taxation  so  near 
and  so  constantly  before  the  people  that  Congress  would 
hesitate  long  before  it  voted  the  sums  of  money  it  now  does, 
if  not  for  improper  at  least  for  questionable  purposes. 

Let  me  cull  a  few  sentences  from  recent  debates  to  show 
the  feeling  on  the  subject. 

Ex-Governor  Hendricks  says:  "A  horizontal  tariff  is 
impossible." 

Senator  James  B.  Beck  says:  "  Nobody  asks  or  expects 
this  Congress  to  establish  free  trade  or  tear  down  custom- 


TARIFF    COMMISSION — RANDALL.  361 

houses.  •  •  •  In  adjusting  taxation  on  imports  with  a 
view  only  to  obtain  revenue  or  "  for  revenue  only,"  we  never 
thought  of  discriminating  against  American  industries,  or 
of  depriving  them  of  the  incidental  benefits  or  protection  a 
proper  revenue  tariff  would  afford.'" 

Senator  Bayard  says:  "  The  power  to  tax  by  laying 
duties  upon  imports  may  be  so  exercised  as  to  do  what  it 
has  done  ever  since  the  foundation  of  the  Government,  and 
this  is  to  give  an  advantage  equivalent  to  the  amount  of  the 
tax  to  the  American  producer  or  manufacturer  over  his  for- 
eign competitors  in  the  same  line  of  production  or  manufac- 
ture, and  this  becomes  his  protection." 

Senator  Williams  of  Kentucky  says:  " Nobody  is  for 
free  trade  just  now." 

Senator  Cooke  of  Texas  says:  "  As  an  inevitable  conse- 
quence domestic  manufacturers  and  producers  of  the  articles 
upon  which  such  revenue  import  duties  are  laid  are  to  that 
extent  protected  against  foreign  competition." 

Mr.  Carlisle  of  Kentucky  in  substance  reiterates  these 
sentiments.  So  they  all  say,  with  rare  exception.  The  real 
question  presented  and  which  is  in  controversy  is  the  revision 
of  taxes,  so  we  may  hold  the  control  of  the  markets  of  the 
world  for  the  benefit  of  our  excess  of  production  over  the 
home  consumption. 

I  favor  what  Mr.  Jefferson  declared  to  be  "  discriminating 
duties,"  which  General  Jackson  described  as  "a  judicious 
tariff,"  and  what  Silas  Wright  designated  as  "incidental 
protection."  To  accomplish  these  ends  wisely  and  well  re- 
quires the  greatest  circumspection  and  the  exercise  of  the 
most  careful  judgment. 


16 


CHAPTER  XXL 

FREE  TRADE  * 
BY  HON.  FRANK  H.  HURD. 


MR.  CHAIRMAN,  I  desire  to  say  that  the  Marquis  of 
Ripon  is  the  representative  of  the  Liberal   party 
of  England  in  India,  sent  there  to  secure  the  abrogation  of 
India's  protective  tariff  system  and  open  her  markets  to  the 
operation  of  the  principles  of  free  trade. 

This  policy  has  been  carried  out,  and  under  Ripon 's 
administration,  as  I  have  said,  India  has  adopted  commercial 
freedom.  Immediately  Great  Britain  commenced  the  devel- 
opment of  India's  agricultural  production.  Large  extents 
of  territory  were  made  cultivable  through  the  adoption  of 
systems  of  irrigation.  Railroads  were  commenced  and  the 
work  of  construction  was  vigorously  pushed.  The  interior 
was  opened  up  to  the  coast,  so  that  the  products  of  the  soil 
could  be  cheaply  loaded  in  the  vessels.  Then  the  most 
suitable  seeds  were  distributed  among  the  people.  Cheap 
agricultural  machinery  was  afforded  them.  Under  this 
impulse,  wheat  production  was  so  stimulated  that  last  year 
there  was  a  production  in  India  of  more  than  300,000,000 
bushels,  of  which  a  large  portion  was  a  surplus  above 
domestic  consumption.  Of  this  40,000,000  of  bushels  have 
been  exported,  while  five  years  ago  there  was  scarcely  a 
cargo  of  grain  sent  from  the  shores  of  that  country.  In  the 
first  three  months  of  this  year  this  exportation  has  largely 

*  Speech  in  the  House  of  Representatives,  May,  1884 

(362) 


FREE   TRADE KURD.  363 


increased  over  the  same  period  of  last  year,  indicating  for 
this  year  an  exportation  of  nearly  70,000,000  bushels. 

What  has  been  the  effect  of  this  increased  production  in 
India  upon  our  markets  ?  In  the  last  nine  months  there  has 
been  a  decline  in  the  exportation  of  American  cereals  of 
$47,000,000  in  value,  and  wheat  has  gone  down  in  Chicago 
to  less  than  eighty  cents  per  bushel,  the  lowest  price  that  has 
ever  been  known  in  that  market.  It  is  notable,  Mr.  Chair- 
man, that  just  as  the  exportation  of  wheat  has  increased 
from  India,  the  exportation  has  diminished  from  the  United 
States.  This  development  of  wheat  production  in  India  is 
the  natural  and  inevitable  result  of  the  protective  tariff  in 
America,  which  puts  high  duties  on  foreign  goods.  England 
refuses  to  buy  of  the  farmers  of  America,  who  will  not  take 
her  goods  in  exchange,  and  seeks  her  food  supply  from 
those  countries  who  will  take  her  productions  ;  and  thus 
from  the  farmers  of  America  is  passing  away  the  last  vestige 
of  a  foreign  market. 

I  say  to  the  farmer  of  America  that  the  prospect  for  him 
is  by  no  means  encouraging.  With  elevators,  granaries,  and 
warehouses  all  filled  to  overflowing,  with  the  old  crop  still 
unsold,  with  the  vast  fields  of  the  great  West  greening  to  the 
coming  harvest,  with  crops  unexcelled  in  India,  almost  ready 
for  the  market,  with  splendid  promise  among  all  the  wheat- 
growing  nations  of  the  earth,  and  with  the  price  of  wheat 
less  than  eighty  cents  at  Chicago,  I  predict  that  before 
January  next  the  price  of  wheat  will  be  so  low  that  it  will 
not  pay  the  cost  of  production,  and  the  corn  raised  on  the 
western  prairies  will  be  burned  again  for  fuel  as  was  the 
caso  years  ago.  When  that  time  arrives  the  farmers  will  be 
beggars  in  the  midst  of  their  own  plenty  and  paupers  by 
the  side  of  their  own  golden  gathered  sheaves.  There  is 
absolutely  no  relief  to  the  American  farmer,  except  in  mak- 
ing foreign  markets  for  him.  Talk  about  the  home  market 
which  American  manufacturers  make  for  him.  Already 


364  FREE   TRADE — KURD. 

their  demand  for  agricultural  product  is  diminishing;  already 
they  are  complaining  of  overproduction  everywhere.  It  is 
not  in  their  power  to  consume  what  the  farmers  of  this 
country  can  produce.  There  are,  Mr.  Chairman,  but  two 
ways  in  which  the  farmer  can  find  relief.  One  is  for  the 
proper  authorities  to  make  reciprocity  treaties  by  which  the 
markets  of  other  nations  will  be  open  to  the  products  of 
this  country,  and  the  other  is  for  Congress  to  reduce  the 
expense  of  living  by  cutting  down  the  tariff:  rates. 

The  farmers  sell  in  the  lowest  market  and  buy  in  the 
highest.  They  cannot  cheapen  any  further  the  cost  of  pro- 
duction, but  they  can  reduce  the  tariff,  cheapen  the  cost  of 
living,  and  thus  save  $450,000,000  annually. 

I  have  often  thought  that  people  in  considering  this  branch 
of  the  subject  do  not  give  sufficient  attention  to  the  effect 
of  our  patent  laws  in  giving  protection.  Those  who  manu- 
facture with  the  protection  of  our  patent  system  have  a 
monopoly  of  that  business  for  seventeen  years  They  can 
in  most  cases  charge,  in  consequence  of  this  monopoly,  what- 
ever they  please  for  the  article  manufactured,  because  they 
are  free  from  competition  by  their  patent.  They  do  not 
need  any  protective  tariff.  Indeed,  the  latter  can  only  do 
them  injury,  for  as  the  manufacturers  of  the  patented  article 
can  charge  the  same  price  without  a  tariff  as  with  it, 
the  only  effect  of  the  tariff  upon  them  is  to  increase  the 
price  of  their  raw  material  and  plant,  and  thus  diminish 
their  profits.  From  what  I  have  been  able  to  learn  about 
the  history  of  manufacturing  in  this  country,  I  am  satisfied 
that  four-fifths  of  those  who  have  been  successful  in  that 
business  have  become  so  through  the  operation  of  patent 
laws,  who  if  they  knew  their  own  true  interest  would  now 
be  bitter  enemies  of  the  whole  protective  tariff  system. 

But  what  is  the  effect  of  the  tariff  upon  those  manufacturers 
who  have  the  protection  of  the  tariff  alone  ?  I  have  been 
surprised  at  the  want  of  knowledge  exhibited  by  manufac- 


FREE   TRADE — KURD.  3G5 

turers  with  whom  I  have  talked  upon  the  subject.  When 
I  have  asked  them  how  the  protective  tariff  affected  them, 
I  have  found  very  few  who  could  tell  me  exactly  the  increase 
of  price  which  the  tariff  made  to  them  in  their  business. 
And  when  I  asked  them  how  much  it  affected  the  price  of 
their  product  at  any  particular  time,  they  were  almost  always 
unable  to  tell.  When  I  have  inquired  how  much  the  tariff 
increased  the  prices  of  their  raw  material  and  plant,  and  of 
the  articles  they  were  obliged  to  have  in  order  to  manufac- 
ture, I  have  found  scarcely  any  who  had  given  attention  to 
this  point.  Why,  Mr.  Chairman,  they  will  investigate  the 
laws  of  trade,  the  laws  of  supply  and  demand  ;  they  study 
the  question  of  location,  the  question  of  interest,  and  every 
other  question  that  affects  their  business,  but  they  will  not 
study  the  statute  books  of  their  country  in  order  to  learn 
how  the  laws  of  the  land  affect  them.  And  yet  these  very 
same  people  will  say  that  the  supporters  of  the  Morrison 
bill  are  disturbers  of  business,  because  they  propose  to 
disturb  existing  laws  the  methods  of  the  operation  of  which 
upon  them  they  admit  they  do  not  understand. 

I  know,  however,  of  some  manufacturers  who  have  studied 
this  question.  1  have  a  statement  by  one  of  the  leading 
manufacturers  in  the  State  of  Ohio,  a  manufacturer  of  paper, 
who  says  if  the  duties  were  taken  off  of  all  the  plant  and 
all  the  raw  material  he  was  obliged  to  have  in  order  to  make 
paper,  he  would  surrender  the  duty  on  paper  itself. 

And  I  have  the  statement  made  by  one  of  the  largest 
woolen  manufacturers  in  the  State  of  New  York,  at  a  public 
meeting  in  Chicago,  a  meeting  at  which  I  believe  my  col- 
leage  on  the  Committee  on  Ways  and  Means,  the  gentleman 
from  Ohio  [Mr.  McKinley],  presided,  to  the  effect  that  if  the 
Government  would  give  him  free  trade  in  brick  and  stone 
and  mortar  and  building  material  and  machinery  and  coal 
and  wool  and  dye-stuffs,  and  all  he  needed  in  order  to  manu- 
facture, he  would  take  free  trade  for  his  manufactured  pro- 


366  FREE   TRADE — HURD. 

duct.  What  was  that  but  to  say  that  all  that  protection 
gave  him  with  one  hand  it  took  away  from  him  with  the 
other  ?  I  believe  that  if  the  manufacturers  of  this  country 
in  the  present  condition  of  the  market  would  study  this 
question,  they  would  find  that  the  increase  of  price  the  tariff 
gives  them  is  more  than  consumed  in  the  increase  of  the 
price  of  the  plant,  of  raw  material,  and  everything  else  they 
must  have  in  order  to  manufacture  what  they  sell. 

Anyhow,  I  am  willing  as  one  of  the  Committee  on  Ways 
and  Means  to  propose  to  the  manufacturers  of  this  country, 
if  they  will  show  what  the  net  result  of  protection  is  to  them, 
that  I  will  help  to  pass  a  law  giving  them  that  net  result, 
leaving  them  undisturbed  in  every  other  respect.  The  effect 
of  that  would  be  to  make  the  rates  much  lower  than  those 
fixed  in  the  Morrison  bill,  to  leave  the  manufacturer  as  well 
off  under  the  law  as  he  is  at  present,  and  give  the  people 
cheaper  goods  everywhere. 

Mr.  Chairman,  all  manufacturers  need  cheap  raw  material 
and  plant  and  a  large  market  to  sell  to.  The  protective 
tariff  deprives  them  of  both.  It  increases  the  price  of  the 
one  from  forty  to  fifty  per  cent,  more  than  it  ought  to  be, 
and  it  necessarily  limits  the  other.  The  manufacturers  all 
over  the  country  now  are  complaining  of  overproduction. 
Overproduction  is  only  another  word  for  the  phrase,  limited 
market;  for  no  man  overproduces  who  has  a  market  large 
enough  to  consume  what  he  makes.  Our  manufactures  are 
fastened  in  the  American  market.  The  very  law  which 
gives  them  the  control  of  the  home  market  deprives  them 
of  every  other.  The  inevitable  effect  of  protection  in  in- 
creasing the  price  of  production  disables  them  from  com- 
peting with  the  foreigner  who  manufactures  with  cheaper 
material. 

Sir,  this  very  day  manufacturing  enterprises  everywhere 
are  in  a  condition  of  embarrassment,  and,  as  manufacturers 
have  testified  before  the  Ways  and  Means  Committee,  because 


FREE   TRADE — HURD.  367 

they  have  more  goods  on  hand  than  they  can  sell.  The  neces- 
sity has  come  to  them  of  a  greater  market  than  the  domestic 
one  and  they  must  have  it;  but  they  never  can  have  it  as 
long  as  the  high  tariff  stands  in  the  way  of  trade  and  ex- 
change. If  there  ever  was  a  day  in  America,  Mr.  Chair- 
man, when  manufacturers  were  benefited  by  protection,  that 
day  has  gone  now. 

Our  manufacturers  have  not  markets  large  enough,  they 
have  surrendered  the  markets  of  the  world  to  England. 
Last  year  England  sold  abroad  one  billion  five  hundred 
million  dollars1  worth  of  manufactured  goods,  and  America, 
exclusive  of  the  manufactured  products  of  agriculture,  sold 
abroad  barely  seventy  million  dollars7  worth.  Fifteen 
hundred  millions  of  dollars  for  that  little  stormy  island  and 
seventy  million  for  this  continent!  Yet  we  have  opportuni- 
ties and  advantages  vastly  superior  to  hers.  She  has  to  go 
thousands  of  feet  under  the  land  and  under  the  sea  to  get 
her  iron  and  her  coal,  and  go  thousands  of  miles  over  the 
land  and  sea  to  get  her  cotton  and  her  wool.  We  find  here 
our  iron  and  coal  close  to  the  surface,  on  the  mountains  and 
hillsides,  and  can  tumble  them  together  into  the  furnaces. 
We  have  the  vast  cotton  fields  of  the  sunny  South  and  the 
wide  pasture  fields  of  the  West  for  sheep  to  give  us  an 
abundance  of  cheap  cotton  and  cheap  wool.  It  is  an  in- 
effaceable stain  on  the  American  name  that  the  markets  of 
the  world  have  thus  been  surrendered  to  Great  Britain,  our 
great  rival.  Think  you  that  if  we  could  have  sold  abroad 
of  our  manufactured  goods  one  billion  dollars'  worth  last 
year  there  would  have  been  this  stagnation,  overproduc- 
tion, and  depression? 

If  I  could  burn  into  the  brains  of  the  manufacturers  of 
America  one  sentence,  it  would  be  this:  "  Turn  from  this 
constant  introspection  to  the  nations  of  the  earth;  down 
with  the  walls,  out  to  the  sea."  There  are  two  billion  people 
in  the  world  who  want  to  buy  what  you  make.  Rise  to  the 


368  FREE   TRADE — HURD. 

height  of  the  great  thought  that  this  immense  population 
can  be  supplied  by  you  with  the  implements  of  husbandry, 
the  tools  of  artisanship,  and  the  various  articles  of  human 
handicraft.  But  they  will  not  take  your  goods  until  you 
take  theirs.  Let  your  tariff  disappear,  and  then,  0  manu- 
facturers! your  attention  will  be  diverted  from  the  profitless 
contests  of  domestic  competition  to  the  generous  rivalries  of 
foreign  trade  and  in  the  easy  victories  which  you  will  win, 
a  wealth  will  come  to  you  of  which  you  do  not  dream  to-day. 

In  conclusion,  let  me  say  a  word  as  to  the  effect  of  this 
tariff  system  upon  the  wages  of  labor.  It  is  claimed  that 
the  wages  of  the  laborer  are  increased  by  protection.  This 
cannot  be,  except  upon  tli is  theory;  that  by  legislation  you 
keep  out  of  this  country  the  products  of  foreign  manufac- 
turers from  competition  with  the  products  of  the  American, 
and  thereby  the  latter  is  enabled  to  charge  higher  prices  for 
his  goods,  out  of  which  he  makes  greater  profits,  from 
which  he  is  enabled  to  pay  and  does  pay  larger  wages  to  his 
employes. 

It  is  manifest  that  this  theory  cannot  apply  to  the  ordinary 
day  laborer,  or  to  artisans  like  the  mason  and  the  carpenter, 
or  to  the  farm  worker,  or  the  railway  employee,  for  none  of 
those  make  any  articles  with  which  similar  foreign  articles 
can  come  into  competition.  These,  therefore,  are  all  unpro- 
tected laborers,  and  the  only  influence  of  the  tariff  upon 
them  is  to  increase  the  cost  of  their  living,  and  thus  to  take 
from  instead  of  add  to  their  wages. 

But  it  is  said  the  laborers  are  benefited  and  wages  in- 
creased in  the  manufacturing  industries.  I  am  perfectly 
willing  to  admit  that  if  you  will  compare  this  country  with 
any  other  country  of  the  Old  World  which  has  precisely  the 
same  tariff  policy,  the  wages  in  this  country  will  be,  as  they 
ought  to  be,  higher  than  the  wages  there.  Take,  for  in- 
stance,  England  and  America,  and  let  them  both  have  either 
the  same  protective  tariff  or  the  same  policy  of  free  trade, 


FREE   TRADE — HURD.  369 

and  you  will  always  find  wages  higher  here  than  there.  But 
this  is  not  because  of  the  effect  of  legislation,  but  as  a  result 
of  the  peculiarly  favorable  conditions  for  labor  which  we 
enjoy  politically  and  territorially. 

The  protectionist,  starting  with  the  proposition  that  wages 
are  higher  here,  maintains  that  there  should  therefore  be 
protection  to  American  labor  in  order  that  it  may  not  be 
brought  into  competition  with  the  pauper  labor  of  the  Old 
World.  My  mind  reaches  the  very  opposite  conclusion. 
The  fact  that  we  have  high-priced  labor  here,  better  wages 
for  labor  here  than  abroad,  is  conclusive  evidence  to  me  that 
we  do  not  need  protection,  and  that  what  we  do  need  is  the 
speedy  opening  of  the  markets  of  the  world. 

High-priced  labor  means  efficient  labor,  skilled  labor, 
intelligent  labor,  productive  labor.  Pauper  labor  means 
inefficient  labor,  unskilled,  unintelligent,  unproductive  labor. 
Let  competition  come  between  high-priced  labor  and  pauper 
labor,  and  pauper  labor  will  always  go  to  the  wall.  I  can 
understand  why  the  poorly-paid  laborers  of  the  Old  World 
should  get  down  on  their  knees  and  lift  up  their  hands  and 
pray  for  protection  against  the  high-priced  labor  of  America; 
but  I  can  not  understand  why  the  high  priced,  efficient, 
productive  labor  of  America  should  beg  protection  against 
the  products  of  the  pauper  labor  of  the  world. 

Mr.  Chairman,  it  is  inevitable  that  when  competition 
comes  between  these  classes  of  labor,  high-priced  labor 
must  always  win  the  victory.  I  will  mention  an  instance 
which  will  illustrate  my  meaning.  Gunny-bags  are  made 
out  of  jute,  and  this  manufacture  is  carried  on  very  largely 
in  Calcutta  by  the  cheapest  labor  in  the  world,  the  women 
getting  from  five  to  eight  cents  a  day  and  the  men  from 
seventeen  to  twenty  cents.  Within  a  short  time,  as  I  have 
been  informed,  a  gentleman  has  started  the  business  of 
making  gunny-bags  in  one  of  the  eastern  cities.  He  has 
built  a  structure,  obtained  his  machinery,  arid  he  pays 
16* 


370  FREE   TRADE— KURD. 

women  employees  eighty  cents  to  one  dollar  a  day,  men 
one  dollar  and  twenty-five  to  one  dollar  and  fifty.  Yet  with 
this  high-priced  labor  he  has  almost  gotton  control  of  the 
gunny-bag  market  in  South  America  and  this  country.  He 
says  if  you  will  let  him  have  jute  free  he  will  undersell  the 
Indian  pauper  labor  in  the  streets  of  Calcutta  itself. 


CHAPTER  XXII. 

THE  TARIFF. 
BY  HON.  WM.  P.  FRYE.* 


MR.  PRESIDENT:  The  Senator  from  Texas  [Mr. 
Coke]  on  Tuesday  last  used  the  following  language: 
"  The  word  protection  should  be  expunged  from  our  vocabu- 
lary. It  means  monopoly;  it  means  exclusive  privilege;  it 
means  subsidy;  it  means  that  all  shall  be  taxed  and. made 
to  pay  tribute  to  the  favored  few.  It  means  combinations 
and  lobbyists;  a  diversion  of  legislation  from  legitimate 
channels  —  from  the  great  public  interest  to  the  interests  of 
a  few  favored  ones.  It  means  a  wholesale  robbery  of  the 
people,  and  especially  of  the  American  workingman,  in 
whose  behalf  it  is  invoked." 

The  Senator  from  Kentucky  [Mr.  Beck]  in  his  speech,  in- 
dicated very  clearly  that  his  opinion  was,  that  protection  was 
simply  a  pliant  tool  of  New  England  monopolists,  and  his 
colleague  [Mr.  Williams]  succeeding  him,  declared  it  was  a 
legalized  tyranny.  Mr.  President,  you  may  consult  the 
Democratic  party  for  the  last  sixty  years,  go  back  to  the 
heyday  when  Mr.  Hayne  of  South  Carolina  declared  in  the . 
United  States  Senate  that  protection  would  prove  to  the 
country  worse  than  an  Egyptian  plague,  and  that  free  trade 
would  abound  in  blessings  next  to  the  Christian  religion, 
and  come  down  to  now,  and  you  will  find  that  it  has 
denounced  a  protective  tariff  as  "  robbery, "  as  "  plunder," 

*  Speech  in  the  United  States  Senate,  February  10,  1882. 

(371) 


872  THE  TARIFF — FRYE. 

as  "a  system  of  swindling,"  as  "a  means  "by  which  to  make 
the  rich  richer  and  the  poor  poorer,"  as  a  specter  grim  and 
ghastly  which  takes  its  place  at  the  head  of  every  poor 
man's  breakfast-table,  which  scowls  at  him  every  time  he 
lights  his  pipe,  and  yet,  sir,  right  in  the  teeth  of  these  sav- 
age denunciations,  fidelity  to  truth  compels  me  to  declare 
that  I  am  a  protectionist  from  principle.  If  there  was  no 
public  debt,  no  interest  to  pay,  no  pension  list,  no  army  and 
no  navy  to  support,  I  still  should  oppose  free  trade  and  its 
twin  sister,  "  tariff  for  revenue  only,"  and  favor  protective 
duties. 

Mr.  President,  it  seems  to  me  that  protection  is  absolutely 
essential  to  the  encouragement  of  capital,  and  equally  neces- 
sary for  the  protection  of  the  American  laborer.  Capital 
needs  the  former  more  than  the  latter,  I  admit,  for  capital 
can  easily  take  care  of  itself.  If  it  gains  no  adequate 
returns  in  one  business,  it  can  readily  seek  it  in  another;  if 
it  reaps  no  profit  at  home,  may  try  new  fields  abroad;  may 
even  let  all  effort  alone,  hide  itself  in  Government  bonds, 
and,  enthroned  there  in  perfect  security,  draw  regularly  its 
interest.  Capital,  too,  is  fearfully  timid.  The  distinguished 
Senator  from  Ohio  [Mr.  Sherman]  a  few  days  since  declared 
that  there  was  nothing  in  the  world  so  easily  frightened  as 
money.  And  yet  the  prosperity  of  the  country  imperatively 
demands  its  constant  use,  its  investment  in  every  industrial 
enterprise.  The  opening  of  mines,  the  forcing  from  the 
hiding  places  of  the  earth  coal,  iron,  and  copper,  the  smelt- 
ing  of  ores,  the  erection  of  forges,  foundries,  and  factor- 
ies, the  employment  of  men  who  must  work  or  starve, 
demand  its  help.  To  inspire^  it  with  the  requisite  courage, 
to  induce  it  to  a  useful  activity,  I  would  encourage  it.  But 
the  labor  of  this  country  beyond  that  of  any  other  demands 
protection  against  the  cheap  labor  of  Europe,  for  the  laborer 
here  has  responsibilities,  duties,  and  necessities  unknown 
there.  His  wages  can  never  go  down  to  theirs  without 


THE    TARIFF FRYE.  373 

absolute  destruction  to  him  and  imminent  danger  to  the 
Eepublic.  The  large  majority  of  our  men  must  earn  their 
bread  by  the  sweat  of  the  brow.  Under  our  Constitution 
they  are  the  Government,  How  can  hungry  men  govern? 
How  can  a  half -paid,  half  fed,  half -educated  citizen  rightly 
and  intelligently  understand  and  perform  the  duties  of  citi- 
zenship? He  must  have  good  food,  enough  of  it,  good  cloth- 
ing, school-houses  for  his  children,  comforts  for  his  home,  and 
a  fair  chance  to  improve  his  condition.  To  this  end  I  would 
protect  him  against  competition  with  the  half -paid  laborers 
of  European  countries  who  have  never  enjoyed  his  privi- 
leges, experienced  his  comforts,  shared  his  duties  and 
responsibilities,  to  whom  his  very  necessities  would  seem 
luxuries. 

The  Senator  from  Texas  joins  issue  with  me  on  this  ques- 
tion of  labor,  and  in  the  same  speech  declares:  "  But  it  is 
said  that  much  higher  wages  are  paid  to  American  opera- 
tives than  to  European  workmen,  and  that  to  enable  the 
mpnufacturers  to  pay  these  higher  wages  they  must  have  a 
protective  as  distinguished  from  a  purely  revenue  tariff,  in 
order  to  exclude  European  competition.  Do  American  man- 
ufacturers pay  their  operatives  higher  wages  ?  Nominally 
and  ostensibly  they  do,  but  really  and  in  fact  they  do  not." 

That  is  a  most  amazing  declaration.  If  it  is  right,  I  am 
wrong;  if  it  is  right,  every  conclusion  of  the  argument  of 
the  Senator  from  Texas  is  entirely  logical  and  legitimate. 
If  that  declaration  made  by  the  Senator  is  false  in  fact, 
then  the  three  hours'  argument  founded  upon  it  is  an  entire 
fallacy.  Now,  sir,  I  hold  in  my  hand  a  book  entitled  "The 
State  of  Labor  in  Europe,"  printed  by  authority  of  Con- 
gress, "  reports  from  United  States  consuls,"  and  the  Senator 
from  Texas  may  take  it,  turn  from  blank  leaf  to  blank  leaf, 
he  may  read  every  page  from  beginning  to  end,  and  I  defy 
him  to  point  to  one  single  statement  of  fact,  to  one  single 
table  of  statistics,  which  does  not  prove  conclusively  that 


THE    TARIFF — FRYE. 


his  statement  is  not  correct  and  that  labor  in  Europe  is 
paid  from  one-half  to  two-thirds  less  than  it  is  in  America 
to-day. 

Again,  I  have  now  in  my  hand  a  book  entitled  "  Labor 
in  Europe  and  America,"  by  Mr.  Young,  chief  of  the  United 
States  Bureau  of  Statistics.  Let  the  Senator  take  this,  turn 
it  from  blank  leaf  to  blank  leaf,  and  he  cannot  find  a  single 
fact  stated  in  the  whole  book  which  justifies  his  statement. 

Now,  Mr.  President,  1  do  not  propose  to  rely  entirely 
upon  consular  reports.  I  am  aware  of  some  difficulties 
attending  the  getting  at  labor  statistics  in  England  and 
France  and  Belgium  and  Germany.  Let  an  American  con- 
sul go  to  the  superintendent  of  an  English  mill,  step  into 
the  counting-room,  and  ask  him  for  his  price-list  paid  for 
wages  for  his  laborers;  will  he  be  treated  politely;  will  he 
receive  the  same  kind  treatment  he  would  in  America?  By 
ho  manner  of  means.  They  are  determined,  if  possible, 
that  information  as  to  wages  shall  not  go  out.  I  am  willing 
to  admit  that  in  some  favored  localities,  in  some  particular 
class  of  work,  for  instance,  if  you  take  some  of  the  most 
skilled  spinners  and  weavers  in  an  English  cotton  mill  and 
in  an  English  woolen  mill,  you  will  find  that  for  two  or 
three  in  a  room,  the  wages  will  come  nearly  up  to  the 
wages  in  an  American  cotton  or  woolen  mill;  but  you  take 
the  wages  of  the  laborers  right  through  the  mill,  and  i 
defy  any  man  on  earth  to  show  that  they  are  not  as  much 
as  one  half  below  the  wages  in  the  cotton  and  woolen  mills 
of  America? 

I  do  not  rely  upon  these  consular  statements  alone;  I  hap- 
pen to  know  men  in  this  country  who  own  mills  in  Great 
Britain  and  in  the  United  States,  who  hire  laborers  there 
and  here,  and  I  obtained  from  them  information  so  that 
there  could  be  no  mistake  about  this.  The  Senator  from 
Texas  must  remember  that  wages  paid  to  the  operatives  in 
the  cotton  factory  by  no  means  represent  the  cost  of  manu 


THE   TARIFF — FRYE.  375 

facturing.  The  cost  of  the  mill  and  machinery,  of  the  coal 
and  gas,  90  per  cent,  of  which  is  labor,  and  the  taxes  upon 
the  property  must  come  into  that  computation. 

Now,  sir,  as  to  the  comparative  cost  of  mills  in  the  two 
countries,  I  call  in  evidence  the  statement  of  the  treasurer  of 
the  Conant  Thread  Company  of  Pawtucket,  Ehode  Island. 
They  own  and  run  thread-mills  in  Great  Britain  as  well  as 
here: 

OFFICE  OF  THE  CONANT  THREAD  COMPANY, 
PAWTUCKET,  R.  I.,  January  19,  1882. 

In  reply  to  yours  of  the  18th  we  can  say,  that  from  the  best  data 
we  can  obtain,  the  cost  of  building  and  equipping  a  cotton  factory 
in  New  England,  as  compared  with  the  cost  of  a  similar  structure 
in  Lancashire  or  Scotland,  is  just  about  double,  or,  to  give  a  few 
figures,  a  new  fire-proof  brick  structure,  furnished  with  steam 
power  and  all  necessary  adjuncts,  in  shape  of  store-houses  and 
accessories,  containing  50,000  to  80,000  spindles,  spinning,  with  all 
machinery  complete  for  spinning  60s.  to  120s.  yarns,  land  and  all, 
can  be  furnished  in  Lancashire  to-day  from  twenty-two  to  twenty- 
four  shillings  per  spindle. 

In  Rhode  Island  the  same  will  cost  $12  to  $15  per  spindle. 

Trusting  this  will  be  satisfactory,  we  remain, 

Yours  truly,  CONANT  THREAD  COMPANY, 

H.  CONANT,  Treasurer. 

Mr.  President,  what  makes  that  difference  in  cost? 
Remember  that  the  mill,  the  coal,  the  gas,  are  all  90  per 
cent,  labor.  Remember  that  the  trees  in  our  forests,  the 
clay  in  our  banks,  the  stone  and  slate  in  our  quarries,  the 
coal  in  our  mines,  are  certainly  as  cheap  as  in  Europe;  and, 
remembering  these  things,  will  the  Senator  from  Texas  tell 
me  what  makes  the  mills  here  cost  twice  as  much  as  they 
cost  there  ?  It  is  because  90  per  cent,  of  the  cost  is  labor, 
and  the  labor  there  is  paid  only  one-half  as  much  as  labor 
here,  and  no  other  reason  can  be  suggested  or  given. 

But,  Mr.  President,  as  to  the  wages  of  the  operatives. 
Again  I  cite  the  Clark  Thread  Company.  I  have  their  pay- 


376 


THE   TARIFF — FRYE. 


roll  in  Scotland  and  here,  and  there  can  be  no  mistake,  I 
take  it,  about  that.     Mr.  Clark  says: 

CLARK  THREAD  COMPANY,  NEWARK,  IS".  J. . 

January  25,  1882. 

DEAR  SIR  :  As  requested,  we  herewith  send  you  a  list  of  wages 
paid  the  workers  in  Clark  &  Co.'s,  Paisley,  Scotland,  and  the 
wages  paid  the  same  class  of  workers  in  Newark,  N".  J. 


Employes. 

Paisley,  Scotland. 

Newark,  N.  J. 

GIKLS: 
Spoolers,  

Per  week. 
$3  50  to  $3  75 

Per  week. 
$7  00  to  $9  00 

Re°lers.  

3  50  to     3  75 

7  50  to     8  50 

Cop-winders,  

3  50  to     3  75 

7  50  to    8  50 

Twisters,  

2  25  to     2  50 

5.00  to    6  60 

Strippers  

1  50  to     1  75 

3  00  to    3  00 

Bobbin-cleaner,  

1.25  to    

2  50  to    2  50 

MEN: 
Carpenters,  .  .  .  >  

7  00  to    7  50 

16  50  to  18  00 

Machinists,  

7.  00  to    7.50 

16.50  to  18  00 

Dyers,  

7  00  to    7  00 

15  00  to  15  00 

Bleachers,  
Firemen  

6.  50  to     6.50 
6.00  to    6.00 

13.50  to  13.50 
12  00  to  13  00 

The  above  is,  to  the  best  of  my  knowledge,  correct. 

These  letters,  coming  from  men  who  know  whereof  they 
affirm,  show  by  their  tables  the  wages  paid  the  operatives  in 
the  two  countries.  About  it  there  can  be  no  mistake,  for 
the  same  men  pay  the  wages  there  and  here.  This  conclu- 
sively shows  that  in  Europe  the  laborers  do  not  receive  one- 
half  as  much  pay  as  do  ours,  and  yet  the  Senator  from  Texas 
declares  they  are  paid  alike. 

Let  me  ask  the  Senator  from  Texas  why  is  it  that 
11,000,000  men  and  women  have  left  Europe,  nearly  all  of 
them  laborers,  and  have  sought  our  shores  ?  Why  is  it  that 
not  200,000  of  them  have  ever  returned  to  Europe  ?  Why 
is  it  that  last  year  700,000  laborers  from  Europe  came  to  our 
country?  Why  is  it  that  50,000  came  from  England,  the 
highest  wage-paying  country  in  Europe  ?  Why  is  it  that 


THE   TARIFF — FRYE.  377 

you  cannot  go  into  a  cotton-mill  or  woolen-mill  in  America 
to-day  and  not  find  on  the  pay-roll  scores  of  English  mule- 
spinners  and  card-strippers  and  dyers;  and  why  is  it  that 
they  never  go  home,  but  the  moment  they  lay  aside  from 
their  high  wages  enough  they  send  for  their  brothers,  their 
fathers,  their  wives,  and  their  children  to  come  out  too  ? 

Sir,  Europe  has  312,000,000  inhabitants,  Massachusetts 
has  1,700,000.  Europe  has  184  times  as  many  inhabitants 
as  Massachusetts.  Both  are  laboring  communities,  both 
engaged  principally  in  manufactures.  Why  is  it  that  in 
Massachusetts  the  laborers  have  $231,000,000  of  money  in 
the  savings  banks,  one-seventh  as  much  as  the  whole  312,- 
000,000  in  Europe  in  their  savings  banks,  postal  and  other? 
Why  is  it  that  in  the  North  alone — leaving  out  the  South 
only  because  she  has  few  if  any  savings  banks — why  is  it 
in  the  States  excluding  the  South,  having  a  population  of 
about  thirty  millions  or  thirty-five  millions,  they  have  $200,- 
000,000  more  in  the  savings  banks  than  they  have  in  all 
Europe  with  its  312,000,000  of  people  ? 

Sir,  to-day,  in  this  nineteenth  century,  when  most  men, 
thank  God,  can  read  and  write,  it  will  not  do  to  tell  the 
American  people  that  the  wages  in  Europe  are  as  high  as 
the  wages  in  America.  I  am  not  yet  convinced,  and  am 
still  a  protectionist.  The  Senator  from  Kentucky  sitting 
near  me  [Mr.  Williams]  and  the  other  Democratic  Senators 
and  the  Democratic  party  sharply  join  issue  with  me  and 
say,  "  No  robbery,  no  plunder,  no  system  of  swindling;  we 
are  for  free  trade;  we  are  for  a  tariff  for  revenue  only." 

Mr.  President,  what  are  free  trade  and  a  tariff  for  revenue 
only  ?  They  are  one  and  the  same,  now  and  forever,  as 
inseparable  as  Siamese  twins. 

Free  trade  is  the  admission  into  our  ports,  the  discharge 
upon  our  wharves,  the  offering  in  our  markets  the  products 
*nd  manufactures  of  the  world,  regardless  of  mere  cost, 
regardless  of  the  amount  of  labor  entering  into  them  and  of 


378  THE   TARIFF — FRYE. 

the  price  paid  for  that  labor,  regardless,  too,  of  the  effect 
upon  our  industries.  By  it  France,  Germany,  Belgium,  and 
England  are  solicited  to  bring  into  our  market  their  silks, 
cottons,  woolens,  linens,  manufactures  of  iron  and  steel,  the 
products  of  the  loom,  the  forge,  and  the  farm,  on  the  pro- 
duction of  which  the  labor  expended  has  cost  from  one- 
quarter  to  two-thirds  of  what  we  should  have  been  compelled 
to  exuend  in  producing  the  same. 

WHAT    IS    A   TAKIFF   FOR    REVENUE   ONLY  ? 

I  suppose  that  England  has  such  a  tariff  more  nearly 
than  any  other  country,  but  even  her  free-trade  theories 
allow  her  to  protect  her  manufactures  by  an  increased  duty 
upon  her  manufactured  article. 

The  chief  items  of  receipt  under  the  head  of  customs 
duties  for  England  during  the  past  year  were,  from — 

Chicory, $360,000 

Cocoa, 230,000 

Coffee, 1,025,000 

Currants, 1,380,000 

Figs 130,000 

Raisins, 775,000 

Hum, 11,510,000 

Brandy, 7,935,000 

Tea, 18,500,000 

Tobacco  and  snuff, 43,000,000 

Wine, 7,000,000 

The  revenue  from  these  duties  last  year  was  $96,000,000; 
almost,  if  not  quite,  as  much  per  capita  as  we  receive  from 
our  tariff.  Undoubtedly  the  party  which  has  such  a  holy 
horror  of  " monopolies,"  of  "New  England  capitalists,"  of 
<'  thieving  manufacturers,"  and  would  never  protect  except 
when  the  necessary  revenue  compelled  it,  would  copy  after 
this  great  free-trade  model,  and  raise  this  revenue  from  tea, 
coffee,  chicory,  cocoa — upon  whatever  we  must  have  and  do 
not  raise  or  make.  With  a  strange  inconsistency,  however, 


THE    TARIFF FRYE.  379 


they  would  collect  forty-five  millions  annually  from  sugar, 
rice,  and  hemp,  raised  in  the  South,  and  therefore  pro- 
tected without  any  violation  of  Democratic  free-trade 
principles.  If  they  undertook  to  raise  the  revenue  by 
duties  upon  manufactured  articles,  those  duties  would  neces- 
sarily be  so  low  as  not  only  to  enable  the  foreign  manufac, 
turer  to  compete  with  ours,  but  to  undersell  him,  so  as  to 
induce  large  importations  and  realize  great  revenues.  The 
only  way  open  to  us  for  a  continuance  of  employment  would 
be  a  reduction  in  the  wages  of  the  employed.  I  have  had 
some  experience  on  the  House  Committee  on  Ways  and 
Means,  and  know  what  my  Democratic  friends  mean  by  a 
"  tariff  for  revenue  only." 

I  have  no  hesitation  in  declaring  that  a  tariff  for  revenue 
only — that  is,  a  tariff  law  under  whose  provisions  the  largest 
amount  of  revenue  can  be  raised  in  the  easiest  manner  for 
the  Government — would  be  more  disastrous  to  our  people 
than  free  trade,  for,  while  it  would  leave  open  and  free  com- 
petition to  all  countries  in  everything  we  raise  or  manufac- 
ture, it  would  increase  the  cost  of  those  we  cannot  and  yet 
must  have,  the  factor  of  competition  being  left  out. 

WHO  ARE  THE  ADVOCATES  OF  FREE  TRADE? 

The  only  prominent  champions  of  free  trade  to-day  in  the 
world  are  England  and  the  Democratic  party  of  the  United 
States.  Amazing  co-partnership  !  For  centuries  England 
was  the  most  earnest,  vigorous,  and  determined  champion  of 
protection  the  world  ever  saw,  enforced  the  extremest  doc- 
trines by  all  the  powers  of  war  and  all  the  arts  of  diplomacy. 
She  destroyed  the  growing  commerce  of  Ireland  with  one 
blow  of  her  navigation  laws,  repressed  her  cattle  raising, 
her  wool  growing,  her  manufactures,  and  made  her  the  waste 
of  to-day.  She  attempted  the  same  role  in  America;  for- 
bade the  exportation  of  her  products  to  any  country  other 
than  her  own;  forced  all  of  the  carrying  trade  into  English 


380  THE    TARIFF FRYE. 


bottoms ;  repressed  all  manufactures  of  fabrics,  and  provided 
by  law  "  that  none  of  the  American  Colonies  should  manu- 
facture iron  of  any  kind;  that  no  smith  should  make  a  bolt, 
spike,  or  nail,  bar  or  rod  iron ;  that  no  mill  or  other  engine  for 
rolling  iron,  or  furnace  for  making  steel  should  be  permitted ;  " 
finally  drove  us  to  revolution  and  lost  the  brightest  jewel 
from  her  diadem.  This  spirit  of  repression  in  the  interests 
of  protection  controlled  her  conduct  with  all  of  her  Colonies. 
NOT  did  England  confine  this  policy  to  them  alone,  but  by 
every  art  and  device  known  to  war  and  peace  she  protected 
and  encouraged  her  manufactures,  strengthened  and  extend- 
ed her  commerce  at  the  expense  of  every  nation  she  could 
frighten  or  cajole.  By  fraud,  diplomacy,  and  war,  by  re- 
pression, protection,  and  prohibition  resorted  to  for  centuries 
with  a  persistency  and  determination  which  never  wavered, 
England  found  herself  " mistress  of  the  seas"  and  manu- 
facturer for  the  world.  Then  with  an  accumulated  capital 
no  other  country  possessed,  with  skilled  artisans  kept  at 
home  by  laws  forbidding  emigration,  with  machinery  far  in 
advance  of  any  other  nation,  with  a  merchant  marine  capa- 
ble of  doing  the  carrying  trade  for  the  universe,  with  the 
key  to  the  whole  situation  in  her  own  hands,  as  she  thought, 
England  suddenly  discovered  the  charms  of  "free  trade," 
opened  her  own  ports,  and  demanded  reciprocity.  Was  this 
new  light  ?  Had  she  found  herself  in  the  wrong  during  all 
these  years  of  wonderful  growth,  and  to  do  works  meet  for 
repentance,  to  repair  the  wrongs  inflicted  upon  the  other 
nations  of  the  earth,  did  she  determine  upon  this  new  policy? 
By  no  manner  of  means.  She  only  counted  herself  able, 
with  the  advantages  she  possessed,  to  compete  with  the  world 
successfully  to  herself — to  hold  her  own  markets  and  gain 
theirs.  Well  may  she  to-day,  with  her  Cobden  Club,  and 
with  every  device  of  which  she  is  so  cunning  a  manipulator, 
join  with  the  Democratic  party  in  a  crusade  against  our  in- 
dustries. With  her  overflowing  population,  with  a  produc- 


THE   TARIFF — FRYE.  881 

tion  one-quarter  of  which  she  cannot  consume  at  home,  with 
a  third  of  her  spindles  idle,  with  protection  against  her 
manufactures  in  almost  every  country,  even  in  her  Colonies 
of  Australia  and  Canada,  well  may  she  champion  the  cause 
of  "free  trade"  in  this  Republic  with  her  fifty  millions  of 
people.  To  succeed  and  to  accomplish  her  purpose  would 
be  the  crowning  glory  of  her  great  industrial  career. 

Mr.  Clay,  in  1824  in  the  Senate,  discussing  the  tariff  said.. 
"  The  existing  state  of  things  presents  a  sort  of  tacit  com- 
pact  between  the  cotton-grower  and  the  British  manufacturer, 
the  stipulations  of  which  are,  on  the  part  of  the  cotton, 
grower,  that  the  whole  of  the  United  States,  the  other  por- 
tions as  well  as  the  cotton-grower,  shall  remain  open  and  un- 
restricted in  the  consumption  of  British  manufactures;  and 
on  the  part  of  the  British  manufacturer,  that  in  considera- 
tion thereof  he  will  continue  to  purchase  the  cotton  of  the 
South." 

On  reviewing  the  great  debates  on  the  tariff  from  1824 
forward  for  ten  years,  it  will  be  seen  that  Hayne,  Hamilton, 
McDuffie,  Wickliffe,  Benton,  Rankin,  G-arnett,  Cuthbert,  and 
others,  leaders  in  the  Democratic  party,  opposed  the  protec- 
tive policy  on  the  ground  that  cotton  was  the  king,  and 
ought  by  right  to  be;  from  a  desire  for  a  market,  a  fear  of 
retaliation  if  we  protected  against  English  manufactures, 
cheap  food  for  the  slaves,  etc. 

One  of  their  leading  statesmen  said:  "  We  must  prevent 
the  increase  of  manufactories,  force  the  surplus  labor  into 
agriculture,  promote  the  cultivation  of  our  unimproved 
Western  lands,  until  provisions  are  so  multiplied  and  reduced 
in  price  that  the  slave  can  be  fed  so  cheaply  as  to  enable  us 
to  grow  our  sugar  at  three  cents  a  pound." 

Mr.  Clay  rebuked  this  strangely  selfish  spirit:  "  The  gen- 
tleman would  have  us  abstain  from  adopting  a  policy  called 
for  by  the  interests  of  the  greater  and  freer  part  of  the 
population.  But  is  that  reasonable?  Can  it  be  expected 


382  THE   TARIFF — FRYE. 

that  the  interests  of  the  greater  part  should  be  made  to  bend 
to  the  condition  of  the  servile  part  of  our  population  ?  That 
in  effect  would  be  to  make  us  the  slaves  of  slaves." 

I  have  listened  to  many  discussions  of  the  tariff  within 
the  last  ten  years  in  Congress,  and  the  animosity  of  the 
Democratic  leaders  toward  protection  has  never  been  con- 
cealed. I  give  a  few  extracts  from  their  speeches,  indicating 
what  tender  nurses  they  would  be  for  a  tariff.  In  1866, 
Mr.  Marshall  of  Illinois,  a  leading  Democrat,  member  of  the 
Committee  on  Ways  and  Means,  speaking  of  the  tariff,  said : 
"  In  all  ages  of  the  world  there  has  been  an  effort  by  legis- 
lative jugglery  to  rob  the  toiling  millions,  build  up  a  favored 
class  who  could  riot  in  unbounded  wealth  wrung  from  the 
hard  earnings  of  labor." 

Again,  he  declares  that  "  the  Democratic  party  was  organ- 
ized and  formed  to  protect  the  people  from  such  legislative 
robbery." 

Dr.  Elliot,  as  I  have  shown,  furnishes  the  key  to  this  in 
his  statement  that  it  was  organized  to  secure  to  the  slaves  of 
the  South  cheap  food  from  the  North. 

Mr.  Marshall,  in  the  same  speech,  calls  the  friends  of  the 
tariff  "  plunderers,"  "  robbers,"  and  declares  that  the  dignity 
of  the  House  alone  restrains  him  from  speaking  the  whole 
truth. 

Hon.  Mr.  Kerr,  subsequently  Democratic  Speaker  of  the 
House,  discussing  the  same  bill,  says :  "  1  arise  for  the  pur- 
pose of  uttering  my  solemn  protest  against  the  infamous  and 
irreparable  crime  which  this  House  threatens  to  perpetrate 
against  the  liberties  of  the  people  of  this  country  by  the 
passage  of  this  bill." 

He  also  speaks  of  his  protective  policy  as  "vicious," 
of  "protective-tariff  swindles,"  of  "our  unwise,  dishonest, 
and  vicious  protective  system,"  "infamous  system,"  and 
concludes  his  speech,  "  if  our  country  is  ever  to  become 
prosperous  and  happy  again,  it  will  be  after  a  return  .  .  . 


THE   TARIFF — FRYE.  883 

to  the  rational  revenue  system  of  her  better  days,"  meaning, 
I  suppose,  that  system  which  was  to  make  the  North  a  great 
feeder  of  slaves. 

Senator  Hamilton,  in  the  forty-second  Congress,  said  of 
protection:  "  It  is  a  firmly  formed,  rotund,  impressive,  seduc- 
tive word,  gaudily,  nay  richly,  attired,  veiled  even  as  the 
Prophet  of  Khorassin,  but  when  stripped  presents  features 
narrow  and  contracted,  repulsive,  with  low  cunning,  morbid 
selfishness,  base  instincts.  There  is  nothing  in  it  broad, 
nor  good,  nor  benevolent,  nor  liberal." 

Said  Mr.  Crossland:  "God  speed  the  day  when  all  the 
doors  of  commerce  shall  be  thrown  open,  all  its  shackles 
knocked  off,  and  all  the  nations  of  the  earth  invited  to  come 
into  our  ports — to  bring  to  our  markets  their  manufac- 
tures free  of  taxation,  and  bid  against  each  other  for  our 
products." 

Senator  Johnston  of  Virginia:  "  Sir,  I  am  opposed  to  this 
protective  system;  I  favor  free  trade." 

And  this  is  the  honorable  Senator's  definition  of  protec- 
tion i  "  It  is  a  cunningly-devised  scheme,  by  which  a  por- 
tion, and  but  a  small  portion,  of  the  community,  under  the 
pretense  of  raising  revenue  for  the  support  of  the  Govern- 
ment, get  rich  at  the  expense  of  a  large  majority  of  the 
people." 

Mr.  Lamison,  of  the  House,  declared  his  belief  in  free 
trade,  and  said  :  "  The  prosperity  of  the  country  will  be 
increased  if  all  our  ports  are  thrown  open  and  the  commerce 
of  the  world  is  invited  to  unload  its  cargoes  without  the  pay- 
ment of  ono  dollar  of  duty." 

In  a  tariff:  discussion  in  1880  Messrs.  Morrison,  Cox,  and 
Mills  declared  themselves  "  free-traders." 

Hon.  Mr.  Muldrow  talked  about  protection  having  "its 
iron  fingers  on  the  throat  of  every  man." 

Hon.  Mr.  Tucker  of  Virginia  said  :  "The  lowest  rate  of 
duty  on  every  article  which  will  produce  the  required 
revenue  is  my  idea  of  a  revenue  tariff." 


384  THE   TARIFF FRYE. 

Hon.  Mr.  McKenzie  of  Kentucky  said  :  "  This  tariff 
system  was  conceived  in  sin  and  brought  forth  in  iniquity. 
It  derives  its  name  from  Tariffa,  where,  during  the  Moorish 
domination  in  Spain,  exactions  from  every  passing  vessel 
were  made.  Our  American  system  .  „  .  is  as  downright 
and  unquestionable  robbery  as  it  was  on  the  part  of  the 
Moors  to  extort  tribute  from  the  unlucky  merchant."  • 

And  I  might  go  on  with  such  morsels  for  the  day,  but  it 
seems  to  me  here  is  enough  to  satisfy  any  man  that  it  will 
not  be  a  prudent  and  judicious  act  to  put  our  protective 
policy  out  to  the  tender  care  of  such  a  wet-nurse  as  this. 
How  strangely  alike  are  the  discussions  of  that  earlier  day 
and  these  of  the  ]ast  ten  years,  the  same  fearful  prophecies 
of  woe  to  the  land,  of  destruction  to  the  country,  of  sorrow 
to  the  poor,  of  starvation  to  the  laborer,  if  protection 
prevailed. 

A  protective  tariff  prevailed,  too,  notwithstanding  the 
denunciations  and  evil  prophecies  of  these  latter-day  Demo- 
cratic saints,  an'd  what  followed  ?  I  let  Dr.  Loring,  Com- 
missioner of  Agriculture,  in  a  speech  recently  made  at 
Boston,  reply  :  "This  Republic  has  increased  in  population 
at  the  rate  of  a  million  a  year  during  the  last  decade,  rival- 
ing now  every  country  in  the  world  except  Russia.  It  is 
not  necessary  to  go  back  a  half  a  century,  or  even  twenty- 
five  years,  to  obtain  the  most  gratifying  evidence  of  our 
progress  in  the  work  of  tilling  the  soil.  But  starting  in 
1870,  at  which  time  we  had  reached  an  enormous  production 
in  proportion  to  our  population,  let  us  make  our  comparisons 
with  the  returns  of  1880.  In  1870  the  amount  of  cotton 
produced  was  4,352,317  bales  ;  in  1880  more  than  6,000,000 
bales.  In  1870  the  amount  of  Indian  corn  raised  was 
760.940,594  bushels;  in  1880,  1,754,449,435  bushels.  In 
1870  the  wheat  crop  was  287,745,626  bushels;  in  1880  it 
was  459,667,022  bushels.  In  1870  the  crop  of  oats  reached 
282,107,157  bushels;  in  1880,  407,859,033.  In  1870  the 


THE   TARIFF — FRYE.  385 

tobacco  crop  amounted  to  262.735,341  pounds;  in  1880  it 
amounted  to  473,107,573  pounds.  The  increase  of  agricul- 
tural products  was  nearly  one  hundred  per  cent,  in  these  ten 
years,  and  in  the  last  year  of  this  decade,  from  1879  to  1880, 
out  of  this  vast  increase  of  our  crops  and  products,  our 
cattle  export  rose  from  $13,000,000  to  $14,000,000;  corn, 
from  $43,000,000  to  $50,500,000  ;  wheat,  from  $167,698,- 
000  to  $190,546,000;  flour,  from  $35,000,000  to  $45,000,- 
000;  cotton,  from  $209,852,000  to  $245,534,391;  beef,  from 
$7,000,000  to  $12,000,000;  lard,  from  $28,000,000  to  $33,- 
000,000;  and  pork,  from  $5,000,000  to  $8,000,000.  Mark 
also  the  growth  of  American  manufactures  in  half  a  century. 
In  1830  the  amount  invested  in  cotton  manufactures  was  a 
little  more  than  $40,000,000.  Fifty  years  have  passed  away 
and  the  amount  of  capital  invested  in  mills  and  subsidiary 
work  is  more  than  $225,000,000.  Of  our  woolen  manufac- 
tures the  statistics  are  more  imperfect,  but  I  have  ascertained 
that  in  1840  the  value  of  the  product  was  $20,696,699,  and 
in  1880  the  value  of  woolens,  worsteds,  carpets,  and  hosiery 
produced  was  $234,587,671.  In  1870  the  silk  productions 
of  the  United  States  were  valued  at  $12,210,662;  in  1880, 
at  $34,410,463.  Fifty  years  ago  the  shoe  and  leather  indus- 
try had  hardly  a  national  reputation.  In  1870,  however, 
there  were  4,237  tanneries  in  the  United  States,  employing  a 
capital  of  $42,710,505  annually,  and  producing  leather 
valued  at  $86,169,883.  The  growth  of  the  iron  and  steel 
industry  has  been  equally  remarkable.  In  1810  we  pro- 
duced only  50,000  tons  of  iron,  and  our  largest  furnace 
could  yield  only  1,100  tons  annually.  But  in  1830  the 
product  was  165,000  tons;  in  1860,  1,000,000  tons;  in  1880 
the  iron  and  steel  works  in  the  United  States  produced 
7,265,100  tons. 

"The  aggregate  annual  product  of    our   manufacturing 
and  mechanical  industries  is  now  more  than  six  thousand 
millions  of    dollars.     Of    this  vast  product  less  than  two 
17 


386  THE    TARIFF FRYE. 

hundred  millions  are  exported.  And  of  the  nine  hundred 
millions  produced  by  agriculture,  less  than  ten  per  cent,  is 
exported.  On  the  self-supporting  power  of  the  American 
people,  and  of  the  mutual  relations  existing  between  our 
industries,  we  can  dwell  as  Americans  with  the  most  pro- 
found  satisfaction." 

The  wildest  enthusiast  for  protection  in  1824  never 
dreamed  of  any  such  marvelous  progress  in  industrial  pros- 
perity as  this.  I  have  referred  to  two  eras  of  protection, 
and  the  unparalleled  prosperity  of  both  no  man  can  gainsay. 
I  know  that  free-traders  tauntingly  point  to  1873,  its  panic 
and  subsequent  hard  times.  But  what  had  that  to  do  with 
protection  ?  Its  causes  are  familiar  to  every  Senator,  and  I 
do  not  propose  to  enter  upon  a  discussion  of  the  war,  an 
inflated  currency,  wild  speculations  resultant  to  it,  and  to 
the  other  causes  common  to  other  countries  and  ours.  Why, 
free-trade  England  was  worse  off  than  we.  More  than  half 
of  her  spindles  were  idle  ;  half  of  her  workingmen  were 
out  of  employment,  and  she  was  feeding  more  paupers  than 
ever  before.  Suppose  we  had  had  no  protection  against  her 
then!  She  would  have  poured  her  surplus  products  into 
our  markets,  our  manufacturers  would  have  been  literally 
crushed,  and  it  would  have  taken  many  years  for  recovery 
of  our  position.  History  repeats  itself.  Our  periods  of 
prosperity  have  been  the  years  of  protection,  and  of  adver- 
sity those  of  free  trade  ;  and  by  free  trade  I  mean  a  tariff 
for  revenue  only.  In  1789-1801  we  had  protection;  in 
1801-1812,  free  trade;  in  1812-1816,  protection;  in  1816- 
1824,  free  trade;  in  1824-1833,  protection;  in  1833-1842, 
free  trade;  in  1842-1847,  protection;  in  1847-1861,  free 
trade;  and  in  1861-1881,  protection  again. 

Take,  for  an  example,  those  good  old  Democratic  times 
from  1847  to  1860.  That  party  found  the  country  when 
they  took  it  in  a  condition  of  healthy  prosperity,  placed  it 
promptly  under  a  tariff  for  revenue  only,  held  it  for  twelve 


THE   TARIFF — FRYE.  387 


years,  left  it  in  debt,  with  its  Treasury  bankrupt,  unable  to 
borrow  a  few  millions  even  for  twelve  per  cent,  interest,  its 
industries  almost  destroyed,  its  courage  completely  paralyzed. 
The  Republican  party  received  it  in  this  condition,  placed  it 
as  promptly  under  a  protective  tariff,  carried  on  a  four  years 
war,  raised  billions  of  dollars  by  taxation,  other  billions  by 
bonds,  paid  its  debt  for  years  at  the  rate  of  one  hundred 
millions  a  year,  reduced  the  rate  of  interest  to  three  and  a 
half  per  cent.?  and  have  it  to-day  in  the  most  prosperous 
condition  it  ever  enjoyed.  When,  in  the  history  of  this  or 
any  other  country  has  free  trade  proved  a  blessing  ?  Now 
and  in  England,  every  free-trader  cries.  But  I  have  already 
tried  to  show  that  she  never  could  have  experimented  with 
what  sho  calls  free  trade  if  she  had  not  first  achieved  great- 
ness and  power  under  protection.  But  what  are  the  facts  ? 
Is  England  prosperous  to-day  ? 

That  the  English  people  arc  thoroughly  aroused  to-day  on 
this  vital  question  of  protection  I  think  no  man  will  deny, 
and  it  is  my  firm  belief  that  the  English  workingman  will, 
before  ten  years  have  passed,  have  compelled  the  Govern- 
ment to  renounce  its  free  trade  and  adopt  protection. 

The  only  country  in  the  world  I  know  of  that  has  thor- 
oughly free  trade  forced  upon  her  by  compulsory  process  is 
that  most  distracted  and  unfortunate  land,  Ireland.  Before 
the  union  her  manufacturing  industries  were  protected 
against  England  by  duties  on  woolens,  silks,  cotton,  yarn, 
and  twist,  and  cotton  manufactured  goods.  Her  calicoes 
and  muslins  were  protected  by  a  duty  almost  prohibitory, 
and  Ireland  was  rapidly  becoming  a  successful  manufactur- 
ing country,  Her  people  were  happy,  contented,  industrious,' 
and  prosperous.  There  was  a  loom  in  almost  every  house, 
and  with  it  comfort  came,  too.  Her  linens  were  known  and 
appreciated  all  over  tho  world,  and  her  silks  were  gaining  a 
ready  market.  There  were  in  1800,  as  appears  by  an  im- 
perfect census  then  taken,  over  8,000  weavers  employed  *n 


388  THE   TARIFF — FRYE. 

Cork  alone,  over  5,000  manufacturing  woolen  goods  in 
Dublin,  3,000  making  blankets  in  Balbrigan,  2,000  weaving 
calicoes  in  Wicklow,  1,000  making  flannels,  while  the  num- 
bers engaged  in  linen  work  were  immense.  This  linen  trade 
was  encouraged  by  subsidies,  but  they  were  gradually  with- 
drawn until  all  protection  ceased  in  1826.  In  1825  more 
than  thirteen  million  of  dollars  were  expended  in  the  pur- 
chase of  coarse,  unbleached,  home-made  webs  of  linen. 
What  a  power  of  good,  of  comfort,  and  of  happiness,  those 
home-made  webs  revealed.  England,  not  content  with  de- 
stroying Ireland's  navigation,  with  crushing  out,  in  the 
earlier  days,  her  manufacture  of  woolens,  greedy  to  manu- 
facture for  the  world,  determined  that  the  rest  of  mankind 
should  raise  the  raw  materials  to  feed  her  hungry  jooms,  as 
the  South  wanted  us  to  feed  their  slaves,  beguiled  poor 
Ireland  into  assenting  to  the  act  of  the  union,  under  the 
terms  of  which  every  duty  was  repealed — some  gradually, 
to  be  sure,  but  certainly.  The  act  continued  the  tariff  on 
woolens  for  twenty  years,  terminated  it  on  calicoes  and 
muslins  in  1821,  on  cotton  yarn  and  twist  in  1816,  withdrew 
all  subsidies  in  1826,  and  Ireland  enjoyed  the  benefit  of 
absolute  free  trade.  What  was  the  result?  England  held 
both  ends  of  the  bargain.  Ireland  could  raise  in  her  fertile 
soil  the  raw  material.  England  could  make  it  into  goods 
cheaper  than  she  could,  but  Ireland  had  no  voice  in  the  price 
to  be  paid  for  either.  In  1840,  another  census  was  taken, 
and  there  were  500  blanket-makers  in  Kilkenny,  200  silk- 
weavers  in  Dublin,  no  carpet  makers  in  all  Ireland,  no  linen- 
weavers  in  Cork,  300  operatives  in  that  city  in  all  the  manu- 
facturing industries,  where  fifteen  years  before  there  were 
8,000  weavers  alone. 

Free  trade  had  done  its  work  and  Ireland  was  starving. 
She  is  the  only  absolutely  free -trade  country  in  the  world  to- 
day, the  only  land  enjoying  its  rare  privileges  in  complete 
fullness,  and  what  a  commentary  it  affords  with  a  good 


THE    TARIFF — FRYE.  889 

climate,  a  fertile  soil,  great  rivers,  splendid  water-power, 
broad,  safe  bays  and  harbors,  an  abundance  of  minerals,  an 
industriously -inclined  people,  it  is  the  most  terribly  vexed, 
troubled,  suffering,  distracted,  impoverished,  starving  coun- 
try in  the  world.  Irishmen,  loving  their  land  earnestly  and 
with  more  unbounded  enthusiasm  than  the  men  of  any 
other  country,  have  been  driven  into  exile  by  the  millions. 
Now,  I  do  not  blindly  charge  all  of  her  woes  to  free  trade 
alone;  land  tenure  has  to  answer  for  a  portion,  not  for  more 
than  half.  Give  her  a  parliament  of  her  own,  and  the  first 
act  passed  would  be  a  protective  tariff,  and  in  twenty  years 
from  now  the  exiled  Irishman  would  return  to  the  land  he 
loves  and  find  it  peaceful,  contented,  and  prosperous.  Eng- 
land, for  her  own  selfish  purposes,  fastened  these  two  fearful 
leeches  upon  her,  and  they  have  been  fattening  on  her  blood. 
England  and  her  ally,  the  Democratic  party,  are  undertak- 
ing to  fasten  free  trade  upon  us,  and,  strange  to  say,  nine- 
tenths  of  our  citizens  of  Irish  birth,  starved  out  of  home 
and  driven  here  into  exile,  go  every  year  to  the  polls  and 
vote  with  England's  Democratic  ally  for  free  trade  ! 

THE  EFFECT  OF  THE    TAEIFF  UPON  THE    PRICE  OF  MANUFACTURES. 

Mr.  President,  the  Senator  from  Kentucky  [Mr.  Beck] 
and  all  advocates  of  free  trade,  or  tariff  for  revenue  only, 
insist  with  great  vehemence  that  our  tariff  enhances  the  cost 
of  everything.  The  facts  fail  to  justify  the  declaration. 
Allow  me  to  give  a  few  illustrations.  In  1860  we  had  a 
tariff  for  revenue  only,  wages  from  forty  to  sixty  per  cent, 
less  than  now,  all  kinds  of  business  dull,  no  demand  for 
goods;  while* in  1880  we  had  the  '-robber  tariff"  and  an 
active  demand. 

There  is  not  a  fabric  in  the  whole  list  that  is  not  cheaper 
to-day  in  the  markets  than  it  was  under  the  (i  tariff  for  rev. 
enue  only."  It  is  an  ascertained  fact  that  our  army  to  day 
is  clothed  cheaper  than  any  in  the  world,  quality  of  the  cloth 
considered. 


390  THE   TARIFF — FEYE. 

Take  iron  used  in  ship-building.  From  1850  to  1860  we 
paid  for  ship  or  tank  plate,  4  cents  per  pound;  flange-iron, 
5  cents;  angle-iron,  3f  cents;  rivets,  5  cents;  average,  4^- 
cents.  From  1870  to  1880  we  paid  for  ship  or  tank  plate, 
2-J  cents  per  pound;  for  flange-iron,  4  cents;  angle-iron,  2^ 
cents;  rivets,  4^  cents;  average,  3f  cents. 

STEEL     RAILS. 

We  commenced  their  manufacture  in  1865,  and  since  then 
have  made  four  and  one-half  millions  of  tons.  In  1864  we 
paid  for  English  steel  rails  from  $80  to  $112  in  gold  per 
ton,  delivered  at  English  seaports;  in  1877  the  prices  in 
England  ranged  from  $72.50  to  $77  a  ton,  while  we,  since 
1870,  as  appears  in  the  testimony  before  the  House  Com- 
mittee on  Ways  and  Means  during  the  last  Congress,  have 
sold  more  than  one  million  tons  as  low  as  $55  a  ton,  and  in 
1877  they  run  down  to  $40,  Even  now,  with  the  tremen- 
dous demand,  they  are  sold  for  from  $60  to  $65.  It  must 
be  remembered  that  there  never  was  so  great  a  demand  for 
rails  as  during  the  last  twenty  years.  Since  1861  we  have 
built  65.000  miles  of  railroad,  and  during  the  last  two  years 
more  miles  than  during  the  ten  from  1850  to  1860,  under 
the  low  tariff. 

The  tariff  stimulates  production  and  cheapens  price.  Let 
me  illustrate  this  with  a  few  examples.  Take  the  manu- 
facture of  pottery.  In  1860  there  were  about  two  thousand 
men  engaged  in  making  pottery.  The  industry  was  strug- 
gling for  an  existence.  In  1870  there  were  over  six  thou- 
sand; in  1880,  probably  twelve  thousand;  in  1860,  the 
capital  invested  was  about  one  million  and  a  quarter;  in 
1870,  five  millions  and  a  quarter;  in  1880,  probably  double 
that  amount.  The  census  of  1880  has  not  been  so  com- 
pleted as  to  enable  me  to  be  exact. 

To-day  there  are  pottery  establishments  in  every  State  in 
this  Union  except  Florida.  Let  it  be  remembered  that  in 
this  industry  the  manufactured  article  represents  more  than 


THE   TARIFF — FKYE. 


391 


ninety  per  cent,  of  labor;  that  the  wages  in  Europe  are  con- 
siderably  less  than  one-half  of  those  paid  here.  Return  to 
free  trade,  and  no  pottery  manufactory  could  run  for  six 
months.  What  has  been  the  result  as  to  prices?  Pottery 
sells  to-day  in  the  United  States  for  thirty  per  cent,  less  than 
it  did  in  1860. 

Take  worsted  goods,  the  creation  entirely  of  our  protective 
tariff,  and  silk  goods  also.  Read  these  instructive  tables 
taken  from  the  census.  See  the  wonderful  growth  of  both 
industries,  the  number  employed,  the  annual  wages  paid  of 
$15,000,000,  and  then  tell  me,  is  protection  destroying  the 
country? 


Year. 

Number  of 
establish- 
ments. 

Number  of 
laborers. 

Capital 
invested. 

Wages  paid. 

Silk  manufactures:. 
I860,  

139 

4,535 

$2,926,980 

$1  050  224 

1870,  

86 

6,649 

6,231,130 

1,942,286 

1880,  

290 

34,440 

15,394,700 

9,107,835 

Worsted  goods: 
1860     .      .  . 

3 

2  378 

3  230  000 

543  681 

1870,  

102 

12,920 

10,085,778 

4,368,857 

1880,  

75 

18,773 

20,411,043 

5,645,681 

And  yet  both  silks  and  worsteds  are  selling  for  consider- 
ably less  now  than  under  the  "  tariff  for  revenue  only." 

How  is  it,  Mr.  President,  that  the  tariff,  seemingly  a  tax 
upon  manufactures,  cheapens  instead  of  enhances  the  price? 
Ireland  could  answer  that  understandingly.  She  learned 
by  bitter  experience  how  much  tho  price  of  raw  material 
was  reduced  when  obliged  to  sell  it  to  England,  and  how 
much  the  value  of  goods  made  from  it  was  enhanced  when 
forced  to  buy  it  back  manufactured,  the  factor  of  competi- 
tion expelled.  "Worsted  goods  illustrate.  Twenty-five  years 
ago  we  made  none  in  this  country,  and  the  prices  were 
extravagantly  high.  In  1862,  encouraged  by  the  high  tariff, 
we  started  a  dozen  establishments.  In  1880,  they  had 


392 


THE   TARIFF FRYE. 


grown  to  seventy-five,  with  a  capital  of  more  than  twenty 
millions  of  dollars.  They  were  rival  establishments,  com- 
peting with  each  other  for  the  markets,  each  striving  to 
reduce  the  cost  without  cutting  down  the  wages.  So  they 
appealed  to  the  inventive  genius  of  the  country,  levied  con- 
tributions upon  that,  and  it  responded  wonderfully  with 
machinery  marvelous  in  its  ingenuity,  power,  and  capacity. 
And  so,  year  by  year,  the  cost  of  the  cloths  was  reduced, 
not  only  here,  but  abroad.  And  such  has  been  the  history 
of  the  result  in  every  industrial  enterprise  started  here. 
The  Senator  from  Kentucky  [Mr.  Beck]  talks  about  the 
monopolies  of  New  England.  Why,  sir,  there  is  not  a 
monopoly  in  New  England;  not  one.  There  is  not  a  busi- 
ness carried  on  there  which  is  not  open  and  free  to  any  man. 
The  only  monopoly  I  know  of  in  this  country  is  a  great 
railroad  without  any  competing  line. 

HOW   DOES   THE    TAKIFF   AFFECT    FAKMERS  ? 

The  Senator  from  Kentucky  [Mr.  Beck]  insists  that  the 
manufacturing  interests  have  been  promoted  at  the  expense 
of  agriculture;  that  our  farmers  have  been  taxed,  ay,  robbed, 
for  their  benefit.  A  serious  charge;  but  is  ft  true  ?  What 
are  the  facts  ?  The  manufacturing  industries  have  prospered 
and  increased  amazingly  during  the  last  twenty  years,  but 
the  progress  in  agriculture  has  been  marvelous,  far  out- 
stripping them  all.  The  census  is  yet  incomplete,  but  the 
following  is  gathered  from  it: 

The  following  are  the  wheat,  corn,  and  oat  crops  in 
bushels  during  the  following  years: 


YEAR. 

Wheat. 

Corn. 

Oats. 

1839,  

84,823,272 

377,531,875 

123,071,341 

1849,  

100,485,444 

592,071,104 

146,584,179 

1859,  

173,104,924 

538,792,743 

172,643,185 

1869  

287,740,626 

760,944  549 

282  107,157 

1879,  

459,479,505 

1,756,861,535 

407,858,999 

THE   TARIFF FRYE.  393 

Barley  increased  from  4,000,000  bushels  in  1839,  to 
40,000,000  in  1879.  Twenty  years  ago  there  were  in  the 
country  23,000,000  of  sheep;  in  1880,  42,000,000.  Then 
the  clip  of  wool  was  60,000,000  Ibs. ;  last  year,  230,000,000. 

Nor,  Mr.  President,  is  the  farmer  left  without  protection. 
The  duty  on  animals  is  twenty  per  cent. ;  bacon,  two  cents 
a  pound;  beef,  one  cent;  buckwheat,  twenty  per  cent. ;  but- 
ter, four  cents  a  pound;  cheese,  four  cents;  corn,  ten  per 
cent.;  hay,  twenty  per  cent.;  oats,  ten  cents  a  bushel;  pease, 
from  ten  to  twenty  per  cent.;  potatoes,  fifteen  cents  a 
bushel ;  rye,  fifteen  cents  a  bushel ;  sheep,  twenty  per  cent. ; 
wheat,  twenty  cents  a  bushel,  etc. 

Besides,  Mr.  President,  are  the  five  millions  of  workers  in 
iron,  copper,  of  cotton  and  wool,  with  five  millions  more 
dependent  upon  them,  all  consuming  and  producing  nothing 
the  farmers  raise,  no  protection  to  them?  Adopt  free  trade, 
destroy  manufacturing,  make  these  men  producers  instead  of 
consumers,  and  would  not  our  farmers  harvest  ruin  from 
the  change? 

It  seems  to  me  that  in  my  own  State  we  have  a  wonder- 
ful illustration  of  the  benefits  of  protection.  Aroostook 
County,  situated  in  our  extreme  northeast,  with  only  one 
railroad  outlet,  and  that  through  the  Canadian  provinces, 
with  fertile  lands  but  long  winters,  its  only  business  agri- 
culture and  lumbering,  inclosed  on  two  sides  by  the  Domin- 
ion  of  Canada,  where  everything  from  the  farm  can  be 
raised  cheaper  than  in  the  States,  shows  by  the  last  census 
how  agriculture  has  been  " robbed"  by  protection  and 
farmers  sacrificed  to  manufacturers.  The  percentage  of  the 
growth  of  population  from  1860  to  1880,  is  eighty-five  per 
cent.,  the  percentage  from  1870  to  1880,  being  forty-one  per 
cent.  A  comparison  of  the  agricultural  products  of  that 
county,  as  returned  in  the  two  censuses  of  1870  and  1880, 
being  the  crops  of  the  years  1869  and  1879,  shows  the  fol- 
lowing percentage  of  increase: 
17* 


394  THE   TARIFF — FRYE. 


Per  cent- 
Tons  of  hay, 69 

Irish  potatoes, 490 

Value  of  orchard  products, 17 

Pounds  of  wool, 121 

Dairy  products  *  (milk,  butter,  cheese), 83 

CEREALS  : 

Bushels  of  barley, 223 

Bushels  of  buckwheat, 82 

Bushels  of  Indian  corn, 9 

Bushels  of  oats, 18 

Bushels  of  rye, 327 

Bushels  of  wheat, 194 

A  comparison  of  the  statistics  of  live  stock  on  farms  as 
returned  in  the  two  censuses  of  the  years  1870  and  1880, 
shows  the  following  percentage  of  increase: 

Per  cent. 

Horses, 79 

Mules  and  asses 10 

Milch-cows 73 

Other  cattle, 68 

Swine, 65 

Sheep, 175 

Working  oxen, 34 

It  produces  millions  of  bushels  of  potatoes,  the  best  in  the 
world,  but  ordinarily,  if  forwarded  to  the  markets,  the  long 
distances  on  bad  roads  running  through  a  foreign  country, 
they  would  hardly  be  worth  the  raising.  Here  the  tariff, 
that  "  robber,"  comes  to  their  relief,  by  laying  a  duty  of 
twenty  per  cent,  on  potato  starch,  starting  up  starch-factories 
over  the  country,  accessible  to  all,  and  easily  taking  their 
surplus  crop  at  fair  prices.  So  the  country  during  the  last 
ten  years  has  been  steadily  growing  in  prosperity,  her 
farmers  getting  out  of  debt,  making  improvements,  clear- 

*  All  the  products  of  the  dairy  in  the  above  computation  were  reduced  to  but- 
ter, on  the  basis  of  three  gallons  of  niilk,  or  two  and  one-half  pounds  of  cheese 
to  one  pound  of  butter. 


THE   TARIFF — FRYE.  395 


ing  up  new  lands,  building  great  barns  and  comfortable 
houses,  supplying  for  their  families  not  only  the  necessaries 
of  life,  but  indulging  them  in  its  luxuries.  I  had  the  pleas- 
ure of  traveling  through  it  last  season,  and  found  it  in  all 
things  a  marvelous  creation,  as  I  believe,  of  a  protective 
tariff. 

Mr.  President,  we  grow  rich  and  powerful  under  protec- 
tion, and  yet  we  have  free  trade  more  absolute  and  abund- 
ant than  all  the  rest  of  the  world  between  thirty-eight  States 
and  nine  Territories,  stretching  from  the  Atlantic  to  the 
Pacific  Ocean,  from  the  Dominion  of  Canada  to  the  Gulf 
of  Mexico.  That  internal  trade  last  year  amounted  to 
eighteen  billions  of,  dollars,  six  times  greater  than  the 
export  and  import  trade  of  Great  Britain.  I  have  used 
figures  from  an  article  in  the  last  International  Review,  en- 
titled "  Influence  of  European  Industries  on  the  United 
States,"  by  J.  L.  Stevens.  Mr.  Stevens  is  our  minister- 
resident  at  Stockholm;  has  been  in  Europe  for  many  years, 
is  a  man  of  ability,  experience,  and  extended  information. 

I  commend  the  article  as  one  replete  with  valuable  infor- 
mation, and  take  the  liberty  of  quoting  his  opinion,  gathered 
from  long  and  careful  observation:  "It  was  the  imperative 
need  of  the  United  States  for  revenue,  and  the  require- 
ments of  our  national  resources  and  of  our  internal  trade, 
which  caused  our  statesmen  at  a  great  national  epoch  to 
adopt  our  present  tariff  policy.  Fortunate  it  was  that  our 
imperative  revenue  needs  to  sustain  national  existence  and 
national  faith  conformed  so  completely  to  the  internal  wants 
of  the  country's  resources  in  respect  of  development.  By 
it  our  national  unity  was  maintained  against  titanic  assaults 
within  and  great  perils  abroad.  By  it  our  national  honor 
has  been  kept  untarnished,  and  now  shines  with  "  purest 
ray  serene"  in  the  financial  markets  of  the  world.  The 
solid  fact  —  the  ripe  fruits  from  the  vigorous  tree  of  expe- 
rience—  give  irresistible  testimony  in  its  favor.  In  less 


396  THE   TARIFF — FRYE. 

than  twenty  years  the  entire  property  of  the  country  has 
increased  from  $16,000,000,000  to  nearly  $38,000,000,000, 
though  in  that  time  $4,500,000,000  were  lost  to  the  country's 
wealth  by  the  war.  The  manufacturing  power  and  products 
of  the  country  have  nearly  tripled,  the  United  States  at 
this  time  turning  out  cotton  and  woolen  fabrics  more  than 
one-fifth  as  much  as  entire  Europe,  while  possessing  less 
than  one-sixth  as  much  population.  Our  entire  manu- 
factures of  all  kinds  are  equal  to  one-fourth  of  the  total 
produced  by  Europe.  In  the  same  period  we  have  built 
more  than  sixty  thousand  miles  of  railroad,  and  since  1865 
have  paid  off  $800,000,000  of  national  debt,  and  reduced 
our  annual  interest  on  the  same  to  the  extent  of  $  7  0,0  00, - 
000.  In  the  same  time,  of  less  than  nineteen  years,  our 
home  commerce  has  augmented  threefold,  our  foreign  trade 
has  largely  increased,  and  our  financial  power  and  prestige 
in  the  commercial  centers  of  the  world  stand  far  higher  than 
they  stood  twenty  years  since," 

Mr.  President,  how  wonderfully  applicable  to  our  country 
now  after  twenty  years  of  protection  is  that  beautiful  picture 
drawn  by  Mr.  Clay  after  the  seven  years  of  the  tariff  bearing 
his  name.  The  only  figures  we  miss  are  "the  overflowing 
Treasury"  and  "our  tonnage  swelled  and  fully  occupied." 
The  deficiency  from  the  picture  of  "  the  overflowing  Treas- 
ury" I  shall  not  attempt  to  account  for,  lest  I  might  be 
accused  with  trying  to  rake  open  the  dying  embers  of  inter- 
necine strife;  but  the  Senator  from  Kentucky  [Mr.  Beck] 
compels  me  to  consider  briefly  the  "  tonnage  swelled  and 
fully  occupied,"  for  he  declares  with  emphasis  that  the  war 
had  nothing  to  do  with  the  destruction  of  our  commerce, 
that  protection  is  answerable  for  it — a  most  amazing  assertion 
in  the  light  of  history!  From  1850  to  1860,  England,  having 
found  that  she  could  not  compete  with  us  in  building  wooden 
ships,  that  she  was  handicapped  with  want  of  material,  was 
compelled  to  freight  it  thousands  of  miles,  that  we  were  not 


THE   TARIFF — FRYE.  397 

only  outstripping  her  in  the  race,  but  were  selling  her  hun- 
dreds of  thousands  of  tons  of  shipping  every  year,  tried 
the  experiment  of  iron  steamships,  found  them  a  success, 
changed  from  side-wheelers  to  propellers,  from  the  ordinary 
high- pressure  engine  to  the  compound,  increasing  the  speed 
and  saving  nearly  one -half  of  the  coal.  Proudly  indifferent 
from  our  success,  we  made  no  such  experiments,  traveling 
in  the  old  pathway  until  we  found  ourselves  in  the  midst  of 
a  fearful  war.  In  July,  1861,  the  Sumter  destroyed  the  ship 
Golden  Rocket.  At  this  time  our  ships  were  in  every  sea, 
in  all  the  ports  of  the  world,  freighted  with  the  productions 
of  every  country,  bearing  the  fortunes  of  thousands  of  our 
citizens.  The  intense  alarm  of  our  merchants  and  ship- 
owners can  at  this  late  day  hardly  be  realized.  Whither 
could  our  scattered  ships  flee  for  protection  ?  The  wing  of 
the  Government  was  powerless  to  cover  them.  English 
ship-yards  became  busy,  and  the  Florida,  the  Alabama,  the 
Georgia,  the  Tallahassee,  the  Chickamauga,  and  the  Shenan- 
doah,  built  in  these  yards,  equipped,  provisioned,  and  manned 
in  English  ports,  were  soon  preying  upon  American  com- 
merce. The  destruction  of  our  shipping  was  immediate  and 
the  effect  upon  our  commerce  terrible.  For  years  we  had 
been  increasing  our  ocean  tonnage  immensely — from  1830 
to  1840,  sixty  per  cent.;  from  1840  to  1850,  seventy-five  per 
cent.;  from  1850  to  1860,  sixty  per  cent.,  and  in  1861  had 
reached  our  highest  point,  having  afloat  2,700,000  tons,  and 
occupying  the  second  place  among  the  nations  of  the  earth 
in  the  extent  of  ocean  tonnage.  A  few  years  more  of  such 
advance  would  have  given  us  the  proud  position  of  mistress 
of  the  seas.  England  saw  this,  feared  it,  and  these  cruisers 
were  only  doing  her  will.  From  1861  to  1866  more  than  a 
million  tons  of  this  shipping  was  lost  to  us  ;  more  than  one 
hundred  thousand  were  burned  by  English  cruisers,  sailing 
under  the  confederate  flag,  and  more  than  nine  hundred 
thousand  sought  protection  under  foreign  flags,  principally 


398  THE   TARIFF — FRYE. 

under  that  of  England.  The  value  of  that  remaining  was 
crippled  by  the  perils  of  the  cruisers,  the  risk  of  sailing 
under  our  flag  being  so  great  as  to  drive  a  large  proportion 
of  the  carrying  trade  into  foreign  bottoms.  Our  prestige 
was  gone,  our  commercial  power  broken,  and  England  was 
without  a  rival.  Who  can  estimate  the  gain  to  her  acquired 
by  her  wrong  to  us,  a  wrong  she  subsequently  admitted 
and  partly  atoned  ?  During  the  war,  with  all  our  energies 
directed  to  the  saving  of  the  nation,  we  saw  her  take  nearly 
all  of  our  carrying  trade,  and  were  utterly  powerless.  For 
two  or  three  years  after  we  were  examining  our  accounts, 
balancing  our  books,  restoring  the  Union,  providing  for  a 
debt  so  enormous  as  almost  to  daze  the  people,  and  she  still 
held  her  advantage.  "Without  any  of  the  advantages  we 
had  in  1850,  with  the  disadvantages  of  heavier  taxation  of 
ships,  of  a  tonnage  improperly  measured  and  taxed,  of 
municipal  assessments  upon  the  vessel's  value,  while  Eng- 
land assesses  only  on  net  earnings,  with  heavier  port  charges 
than  she  pays  in  foreign  ports,  with  higher  wages  of  officers 
and  seamen,  still  there  was  a  door  we  might  have  opened 
for  the  recovery  of  our  carrying  trade,  and  we  never  opened 
it.  For  the  last  ten  years  we  could  build  iron  steamships 
as  good  and  almost  as  cheaply  as  she;  but  to  do  this,  and 
to  establish  lines  to  compete  with  those  already  established, 
required  immense  capital,  and  the  necessary  capital  needed 
encouragement.  If  we  had  paid  our  steamships  for  carry, 
ing  our  mails  to  foreign  countries  as  much  in  proportion  as 
we  paid  the  steamboats  for  carrying  them  on  the  Mississippi 
River,  or  the  stages  for  the  same  service  across  the  prairies, 
we  to-day  should  have  been  far  advanced  on  the  highway 
of  recovery.  If  we  had  followed  the  examples  of  England, 
France,  Germany,  and.  indeed,  of  any  of  the  European 
powers,  our  iron  steamships  would  to-day  be  plowing  their 
seas.  But  we  have  been-  frightened  out  of  our  usual  wits 
by  the  cry  of  "  Wolf."  We  lost  our  carrying  trade  by  the 


THE   TARIFF FRYE.  399 

war,  and  have  not  taken  the  first  step  since  the  war  closed 
to  recover  it  Now,  pray,  what  had  the  protective  tariff  to 
do  with  it  ?  How  could  it  affect  it  other  than  by  reducing 
our  exports  and  imports?  But  it  has  not  reduced  them. 
They  have  been  surely  and  steadily  increasing  from  $687,- 
192,254  in  1860,  until  last  year  they  reached  the  enormous 
sum  of  $1,613,770,633. 

No,  Mr.  Senator,  not  protection,  but  war  did  the  mischief; 
folly  and  cowardice  have  prevented  all  reparation.  In  the 
earlier  days  of  the  Republic,  when  England  undertook  to 
weaken  our  growing  power  on  the  seas,  to  defend  it  we 
declared  war,  expended  $150,000,000  and  thousands  of 
precious  lives;  m  the  latter,  when  the  same  England,  taking 
advantage  of  our  distracted  country  wickedly  and  selfishly 
succeeded  in  accomplishing  what  she  ignobly  failed  in  before, 
we  allowed  her  to  triumph,  lest  the  representatives  of  the 
people  should,  forsooth,  be  taunted  with  voting  for  subsidies. 
But,  sir,  a  discussion  of  the  question  of  the  restoration  of 
our  u swelled  tonnage"  of  the  past  is  hardly  legitimate  to 
the  measure  now  under  consideration,  and  I  refrain,  simply 
asserting  that  Senator  Beck's  method  of  restoration  is  utterly 
delusive;  that  free  trade  m  ships,  the  repeal  of  our  naviga- 
tion laws,  could  not  possibly  have  any  result  other  than  the 
immediate  closing  of  every  ship-yard  in  the  country,  the 
entering  into  other  trades  of  all  of  our  skilled  workmen, 
the  placing  of  our  country  at  the  mercy  of  England  in 
event  of  war,  and  the  complete  surrender  of  our  coastwise 
trade. 

Mr.  President,  I  have  endeavored  to  show  that  the  doctrine 
of  free-trade  sprang  from  a  selfish  and  unworthy  purpose  ; 
that  while  marvelous  changes  have  been  wrought  in  our 
country,  slavery  abolished,  labor  elevated,  industries  devel- 
oped and  multiplied,  the  Democratic  party  still  adheres  to 
the  dangerous  heresy;  that  free  trade  is  antagonistic  to  our 
institutions  and  to  our  civilization;  that  its  adoption  would 


400  THE   TARIFF — FRYE. 


necessarily  degrade  our  workmen,  reduce  their  wages,  and 
have  a  tendency  to  unfit  them  for  American  citizenship;  that 
protection  has  invariably  brought  us  prosperity,  increased 
wages,  decreased  cost  of  manufactures,  and  furnished  a 
ready  market  for  our  farmers;  that  the  best  interests  of  all 
our  people  will  be  secured  by  a  continuance  of  this  the 
Republican  policy.  But,  sir,  I  recognize  as  an  important 
factor  in  this  that  our  tariff  laws  must  be  harmonious,  just, 
and  equitable,  and  that  the  existing  law  does  not  in  all 
respects  answer  this  demand.  Since  the  distinguished  Sena- 
tor from  Vermont  [Mr.  Morrill]  gave  it  to  the  country, 
so-called  amendments  have  been  made  to  it  from  time  to 
time,  some  healthy,  some  unhealthy.  The  condition  of  busi- 
ness, the  requirements  of  trade,  the  necessities  of  the  people 
have  changed ;  the  rulings  of  the  Treasury  Department  have 
modified  its  terms;  there  are  excrescences  that  ought  to  be 
removed,  rates  too  high  that  should  be  reduced,  and  in  some 
instances  too  low,  requiring  raising;  some  articles  now  free 
should  be  taxed,  and  many  now  taxed  should  be  made  free. 
What  is  the  best  method  of  procedure  ?  I  have  taken  part 
in  the  House  of  Representatives  in  two  revisions  of  the 
tariff,  and  in  the  Committee  of  "Ways  and  Means  in  one 
attempted.  This  experience  determines  me  in  favor  of  the 
pending  bill  providing  for  a  commission. 

Mr.  President,  I  thank  the  Senate  for  its  indulgence. 


CHAPTER  XXIIL 

NECESSITY  AND  BENEFITS  OF  THE  SPEEDY 
REDUCTION  OF  TARIFF  TAXATION.* 

BY  HON.  D.  A.  WELLS. 


Ij?DO  not  propose  to  occupy  any  time  this  evening  in  dis- 
\.  cussing  the  tariff  from  the  standpoint  of  theory,  or 
abstract  principles.  Protectionists  are  never  weary  of  assert- 
ing that  only  theorists,  book -worms,  college  professors,  and 
persons  corrupted  by  British  gold  and  foreign  influences 
advocate  free  trade  for  the  United  States;  that  it  is  not  prac- 
tical, or,  as  that  eminent  statesman,  Warner  Miller,  when 
taking  the  chair  of  a  Protectionist  Convention  some  time 
since,  expressed  it  when  he  said:  li  We  plant  ourselves  on 
protection  as  a  matter  of  fact.  The  professors  tell  us  that 
free  trade  is  perfect  in  theory,  but  it  can't  be  applied  to  us. 
It  would  not  correspond  with  the  facts.57  And  this  idea, 
sedulously  inculcated  and  reiterated  for  many  years,  has 
undoubtedly  taken  deep  root  in  the  minds  of  our  people  and 
formed  the  basis  of  a  prejudice,  which  more  than  almost  any 
other  one  agency  has  hitherto  contributed  to  oppose  the 
growth  of  liberal  commercial  sentiments  in  this  country 
But  be  that  as  it  may,  the  time  has  now  fully  como  when  the 
friends  of  free  or  freer  trade  in  this  country  may  boldly  and 
profitably  challenge  and  meet  the  Protectionists  on  their  own 
ground,  and  discarding  for  the  time  being  all  reference  to 

*  This  speech  of  the  Hon.  D.  A.  Wells  was  delivered  in  the  Cooper  Institute, 
New  York  city,  Nov.  22, 1883. 

(401) 


402  REDUCTION    OF    TARIFF    TAXATION. 


political  economy  and  philosophical  theories,  discuss  before 
the  American  people  the  question  of  the  tariff  and  its  reform 
from  the  exclusive  standpoint  of  our  experience  and  the 
actual  and  prospective  industrial  and  financial  condition  and 
necessities  of  the  country. 

And  first  in  the  order  of  such  experience  is  the  fact, 
which  even  those  who  take  but  the  smallest  interest  in  this 
subject  are  beginning  to  recognize,  that  owing  to  our  great 
natural  resources,  our  rapidly  increasing  population,  the 
increased  use  and  power  of  machinery,  and  the  energy  of 
our  people,  the  power  of  domestic  production  continually 
tends  to  be,  and  in  most  departments  of  industry  is,  far  in 
excess  of  the  power  of  domestic  consumption.  In  the  case 
of  agriculture  the  fact  is  so  obvious  that  no  confirmatory 
evidence  is  necessary ;  but,  if  any  is  needed,  it  is  all  sufficient 
to  call  attention  to  the  enormous  surplus  of  food  and  cotton 
which  which  we  now  export  to  other  countries,  and  to  the 
circumstance  that  these  exports  during  the  last  ten  years 
have  increased  out  of  all  proportion  to  any  increase  of  home 
population.  And  in  respect  to  our  so-called  manufacturing 
industries,  it  is  only  necessary  to  refer  to  the  general  com- 
plaint that  business,  though  large  (as  it  necessarily  must  be 
to  supply  the  needs  of  a  nation  of  56,000,000)  is,  through 
excessive  competition,  conducted  with  little  profit;  that  a 
very  large  percentage  of  that  small  part  of  our  manufactures 
which  can  be  subjected  to  foreign  competition  and  which 
have  been  stimulated  by  high  protection  has  either  suspended 
wholly — like  many  of  the  iron  furnaces  and  rolling  mills,  or 
have  in  a  measure  curtailed  production  without  avoiding 
heavy  losses — like  those  of  cotton,  wool,  and  silk;  that  man- 
ufacturers in  certain  lines  of  the  two  last  named  articles 
especially,  have  only  been  able  to  dispose  of  their  surplus 
stocks  by  forced  sales  at  auction  and  at  prices  less  than  the 
cost  of  production;  that  failures  and  fires  (the  latter  the 
inevitable  indicator  and  concomitant  of  bad  times)  are 


REDUCTION    OF   TARIFF   TAXATION.  403 

increasing  at  a  rapid  and  alarming  rate ;  that  the  wages  of 
manufacturing  operatives  almost  everwhere  throughout  the 
country  are  undergoing  extensive  and,  as  the  manufacturers 
claim,  necessary  reductions,  while  the  purchasing  power  of 
wages  is  not  increasing  in  any  equal  measure;  that  the 
opportunities  for  employment  are  conjointly  becoming 
limited;  and,  finally,  that  artisans  especially  imported  from 
foreign  countries  to  work  in  certain  employments  (e.  g.,  glass 
making)  in  the  United  States  are  returning  to  Europe,  with 
a  view  of  bettering  their  condition.  And  lest  I  be  accused  of 
exaggeration  in  my  statements,  I  would  here  ask  attention 
to  the  following  letter,  written  under  date  of  Sept.  24  to  the 
New  York  Tribune,  by  Andrew  Carnegie,  the  well  known 
iron  maker  of  Pittsburg,  in  which  he  says: 

.  -'Much  as  I  regret  to  say  it,  I  believe  that  matters  will 
grow  worse  for  some  months  before  manufacturing  interests 
can  reach  a  profitable  business.  A  much  more  decided  cur- 
tailment of  production  must  take  place  before  there  can  be 
any  improvement.  This  will  be  brought  about  naturally  by 
the  prevalence  of  such  ruinous  prices  as  will  compel  manu- 
facturers to  stop  producing  goods  in  advance  of  the  country's 
needs.  But  as  great  loss  is  entailed  by  curtailment  of 
production,  the  works  are  kept  running  to  their  full  capacity, 
although  prices  have  fallen  to  figures  which  leave  even  those 
manufacturers  who  have  unusually  favorable  facilities  little 
or  no  profit,  and  entail  a  positive  loss  upon  the  average 
manufacturer.  I  think  the  wages  paid  at  the  (iron)  mills  on 
the  seaboard  of  the  United  States  to-day  are  about  as  low  as 
men  can  be  expected  to  take.  In  the  West,  notwithstanding 
a  recent  agreement  of  the  men  to  accept  a  reduction  of  thirty 
per  cent.,  it  now  seems  probable,  from  the  very  unsatisfactory 
outlook,  that  they  will  have  to  be  asked  to  work  for  still  less." 
And  since  this  was  written  more  iron  and  steel  works 
have  suspended  operations,  and  more  men  have  been  thrown 
out  of  employment,  and  wages  have  been  still  further 
reduced. 


404  REDUCTION.  OF   TARIFF   TAXATION. 

WHY   BUSINESS    IS    DULL    AND    UNPROFITABLE. 

Now  I  think  all  will  agree  with  me  that  this  is  a  most 
anomalous  and  curious  condition  of  affairs.  If  there  had 
been  any  recent  and  extensive  failure  of  our  crops;  if  the 
world  no  longer  wanted  the  useful  things  which  we  produce, 
if  the  skillful  hands  of  our  citizens  had  lost  their  cunning; 
if  other  and  competing  countries  had  all  at  once  acquired 
any  superior  advantages  over  us,  any  one  or  all  these  causes 
might  be  given  in  explanation  of  what  we  are  now  experi- 
encing. But  none  of  these  things  have  happened;  and  in  no 
other  country  is  there  anything  of  an  exactly  similar  charac- 
ter occurring.  But  curious  and  anomalous  as  is  the  situation, 
it  is  only  what  might  naturally  have  been  expected  from 
existing  circumstances.  Thus,  it  needs  but  a  superficial 
glance  at  our  tables  of  exports  to  see  that,  comparatively 
speaking,  we  have  but  little  other  than  the  domestic  market, 
and  not  the  whole  of  that,  for  our  vast  and  varied  manufac- 
tured product — the  ratio  of  exports  for  the  years  1879-80 
being  only  12.5  of  manufactured  to  87.5  of  manufactured 
commodities,  or  $102,249,000  of  the  former  to  $721,700,000 
of  the  latter.  And  to  make  up  even  this  beggarly  twelve 
per  cent,  it  was  necessary  to  count  in  lumber,  coal,  and 
leather  as  manufactured  exports. 

Now  it  simply  stands  to  reason  that  if  the  manufacturing 
industries  of  the  United  States  are  to  be  mainly  limited  to 
the  requirements  of  a  domestic  market,  that  their  growth 
must  be  also  limited,  and  far  below  their  normal  capacity 
and  tendencies;  and  if,  under  such  limitations  and  arrest  of 
industrial  development,  we  also  have,  as  is  the  case  in  many 
departments,  more  capital  and  labor  engaged  in  production 
than  is  necessary  to  supply  any  current  demand — three 
mills,  furnaces,  or  factories,  for  example,  where  only  two  are 
needed — then  as  inevitable  and  necessary  consequences,  there 
will  be  disastrous  reductions  of  prices  through  excessive 
competition  for  a  market;  the  extensive  curtailment  or  arrest 


REDUCTION    OP    TARIFF   TAXATION.  405 

of  manufacturing  operations;  the  discharge  and  distress  of 
operatives,  and  a  failure  of  all  those  who  are  not  financially 
strong  enough  to  continue  to  work  without  profit,  or 
carry  stocks  of  goods  indefinitely  for  the  avoidance  of  the 
sacrifice  of  forced  sales — in  short,  the  very  results  which 
everybody  must  acknowledge  are  the  special  characteristics 
of  the  existing  situation.  And  yet  with  such  results  so 
plain  and  palpable  "that  he  that  runneth  may  read,"  we 
find  the  financiers  and  business  men  of  the  country  every, 
where  speculating  and  wondering  what  can  be  the  cause  of 
the  bad  times,  and  prophesying  that  next  week  or  next 
month  things  will  be  better;  when,  if  my  diagnosis  is  cor- 
rect, they  will  not  materially  improve,  but  as  Andrew  Car- 
negie believes,  will  grow  worse  until,  through  wreck  and 
disaster,  the  home  domestic  manufacturing  production  is 
forced  down  into  correspondence  with  or  below  the  require- 
ments for  domestic  consumption — unless  in  the  mean  time, 
through  a  change  in  our  national  fiscal  policy,  other  and 
larger  markets  and  outlets  for  our  present  surplus  product 
can  be  opened,  or  some  special  Providence — like  famine  or 
war  in  the  Old  World — comes  to  temporarily  help  us  out  of 
our  dilemma. 

OUTLOOK   FOE    LABOR   AND    WAGES. 

Such  much,  then,  for  the  general  business  outlook.  Let 
us  next  glance  at  the  prospective  situation  for  labor  and 
wages.  If  the  present  curtailment  or  suspension  of  manu- 
facturing operations  in  this  country  is  to  continue,  or  even 
if  there  is  to  be  merely  a  diminution  in  our  past  ratio  of 
industrial  growth  and  development,  and  we  are  to  con- 
tinue to  have  poured  in  upon  us  annually  from  half 
a  million  to  six  hundred  thousand  immigrants — mainly 
laborers  in  the  prime  of  life:  and  an  annual  increase  of 
our  population  from  natural  causes  of  about  three  per 
cent,  per  annum,  it  would  seem  also  clear  that  there  must 


406  REDUCTION    OF   TARIFF   TAXATION. 

be  extensive  reductions  in  the  wages  of  American  laborers; 
for  with  two,  three,  or  more  sellers  of  labor  for  every  one 
buyer,  the  buyer  will  fix  the  price;  and  the  price  which  the 
buyer  or  American  employer  will  strive  to  fix,  and  indeed 
the  price  which  his  necessities  will  compel  him  to  fix,  if  he 
is  going  to  extend  his  operations  and  avoid  producing  at  a 
loss,  will  be  such  as  will  enable  him  to  produce  equally  cheap 
with  his  foreign  competitor.  A  continuation  of  the  causes 
and  policy  which  restricts  our  American  manufacturers 
merely  to  the  domestic  market  for  the  sale  of  his  products, 
and  debars  him  in  a  great  degree  from  access  to  foreign 
markets,  inevitably  means,  therefore,  low  wages,  and  the 
degradation  and  impoverishment  of  the  masses,  or  ensures 
the  very  results  which  it  is  claimed  a  high  tariff  policy  is 
certain  to  avert. 

WHY  AMERICA'S  MANUFACTURERS  CANNOT  EXPORT  THEIR 

SURPLUS    PRODUCTS. 

But  how  happens  it,  it  may  be  here  naturally  asked,  that 
American  manufacturers  are  unable  to  dispose  of  their  sur- 
plus products  by  the  exportation  and  sale  of  the  same  in 
foreign  markets.  The  answer  is  a  simple  one,  and  yet  to 
very  many  of  our  people  the  problem  involved  seems  very 
difficult  of  solution.  The  matter  admits,  however,  of  a 
ready  comprehension,  if  one  will  only  keep  in  view  and  re- 
flect upon  the  following  circumstances:  First,  from  eighty  to 
ninety  per  cent,  of  all  our  manufactures  exist  because  they 
must  as  a  condition  of  our  civilization,  and  because  no  for- 
eign  products  of  like  kinds  can  be  imported.  Any  one  may 
abundantly  satisfy  himself  of  this  by  analyzing  the  history 
or  origin  of  the  bulk  of  the  commodities  that  pass  him  on 
the  streets  of  any  busy  community,  or  are  exposed  for  sale 
at  the  marts  of  trade.  Let  him,  as  a  matter  of  test  and 
curiosity,  take  a  stand  on  any  of  the  great  thoroughfares  of 
any  of  our  large  towns  and  cities,  and  see  for  himself  how 


REDUCTION    OF    TARIFF   TAXATION.  407 

few  of  the  many  articles  which  pass  on  the  way  to  domestic 
consumers  can  by  any  possibility  be  directly  benefited  by  a 
protective  tariff.  And  first  in  the  long  procession  will  come 
our  great  agricultural  staples,  our  corn  and  our  wheat,  our 
beef  and  our  pork,  our  lard  and  our  tallow,  our  butter  and 
our  cheese,  our  cotton  and  hay,  and  the  typical  American 
wools,  our  fresh  and  canned  fruits  and  vegetables;  for  we 
export  all  these  products,  and  anything  which  can  be  ex- 
ported regularly,  and  sold  in  competition  in  foreign  countries 
with  similar  foreign  products,  cannot  be  directly  benefited 
by  tariff  legislation.  And  in  the  same  category  must  be  in- 
cluded an  immense  variety  of  the  products  of  other  indus- 
tries— our  petroleum,  turpentine,  and  resin;  nearly  all  build- 
ing materials  and  constructions  of  wood,  including  vessels; 
our  products  of  gold,  silver,  and  copper;  our  stoves,  tinware, 
shovels,  axes,  nearly  all  agricultural  machines  and  imple- 
ments, and  most  articles  of  common  hardware;  cheap  boots 
and  shoes,  and  sole  leather;  coarse  cotton  fabrics,  starch, 
refined  sugar,  distilled  spirits  and  alcohol,  most  fermented 
liquors,  wagons,  carts,  most  carriages,  harnesses,  railroad  cars, 
sewing  machines,  all  ordinary  confectionery,  and  the  cheaper 
paper  and  paper  hangings,  photographs,  picture  frames, 
pianos,  India  rubber  goodsv  toys,  watches,  guns,  fixed  ammu- 
nition, newspapers,  buttons,  brooms,  gas,  clocks,  and  a  great 
variety  of  other  articles,  not  one  of  which,  if  the  tariff  was 
entirely  abolished,  would  be  imported  to  any  considerable 
extent;  and  most  of  which,  if  the  tariff  was  entirely  abol- 
ished, would  be  manufactured  and  exported  in  vastly  larger 
quantities  than  at  present.  Secondly,  out  of  our  entire  man- 
ufactures, possibly  twenty  per  cent.,  but  probably  not  more 
than  ten  per  cent.,  reckoning  both  numbers  and  quantities, 
are  in  a  greater  or  less  degree  subject  to  foreign  competition. 
And  third,  and  finally,  in  the  effort  to  protect  this  ten  to 
twenty  per  cent.,  through  the  agency  of  taxation  and  restric- 
tions on  exchanges,  the  cost  of  all  the  products  of  our  entire 


408  REDUCTION    OF   TARIFF   TAXATION. 

industry  is  enhanced  to  such  an  extent  that  exports  only 
exist  in  cases  where  our  natural  advantages  for  production 
are  so  great  as  to  overcome  the  increase  of  cost  thus  artifi- 
cially and  unnaturally  created.  But  doubtless  I  will  be  here 
met  by  Mr.  Kelley,  Warner  Miller,  and  other  advocates  of 
high  protection,  with  the  remark  that  all  this  is  mere  assump- 
tion and  one-sided  assertion;  well  enough,  so  long  as  the 
free-traders  are  doing  the  talking  ?  but  which  will  not  stand 
a  minute  after  the  other  side  has  had  their  chance  to  rejoin 
and  expose  the  sophistry.  Let  me,  therefore,  right  here,  ask 
your  attention  to  a  few  facts  in  the  way  of  evidence  in  sup- 
port of  my  position,  which  I  think  the  more  the  high-tariff 
advocates  chew  upon,  the  harder  they  will  find  it  to  digest. 

I  know  of  nothing  which  more  conclusively  proves  the 
correctness  of  my  proposition,  that  no  community  can  exist 
without  supplying  itself  with  its  own  manufactures  in  the 
largest  measure,  than  the  past  and  present  industrial  experi- 
ence of  the  Southern  States.  Slavery  was  fully  consistent 
with  the  protective  idea — in  fact  it  was  the  logical  outcome 
of  protection.  Capital  protected  labor  wholly  by  owning  the 
laborer,  and  did  indirectly  what  the  system  of  protection 
attempts  to  do  directly — that  is,  it  forced  the  growth  of  in- 
dustries in  certain  grooves.  Under  this  system  we  had  an 
imperial  section  of  land — endowed  with  the  greatest  abund- 
ance of  varied  resources  and  capable  of  sustaining  home 
manufactures  in  endless  variety — almost  wholly  devoted  to 
agricultural  pursuits,  conducted  by  intelligent  owners,  yet 
under  the  necessity  of  the  system  by  the  rudest  and  most 
wasteful  methods;  or,  as  Henry  A.  Wise  once  summed  it  all 
up:  "The  niggers  skinned  the  land  and  the  white  men  skin- 
ned the  niggers/'  But  now  what  do  you  see  ?  This  same 
section  is  exposed  to  absolutely  unrestrained  competition  of 
the  long  established  industries  of  the  North  and  West;  and 
the  South  can  erect  no  tariff  defenses  along  its  boundaries 
for  protection;  and  according  to  our  friends  the  protection- 


i   KEDUCTION    OP  TARIFF   TAXATION.   '  409 

ists,  no  profitable  occupations  could,  under  tlie  circumstances, 
be  open  to  its  people  but  those  pertaining  to-  agriculture. 
But  what  are  the  facts  ?  While  the  South  for  the  first  time 
"breads  herself,"  and  exports  grain,  and  has  doubled  her 
crop  of  cotton,  Southern  manufactures  are  being  established 
everywhere.  Cotton  manufacture  is  more  profitable  at  the 
South  than  in  any  other  country  in  the  world;  and  the  num- 
ber of  Southern  spindles  has  increased  sixty  per  cent,  within 
the  last  three  years.  Iron  is  being  produced  under  such 
conditions  in  Alabama,  Tennessee,  and  West  Virginia  that 
foreign  competition  is  impossible,  and  the  furnaces  of  Penn- 
sylvania are  being  blown  out  and  abandoned;  while  wood 
working  in  Kentucky,  tanning  in  Tennessee,  oil  making  in 
Mississippi,  Arkansas,  and  Louisiana,  and  a  thousand  lesser 
Southern  industries  are  in  a  state  of  intense  activity  and 
progression;  and,  as  an  accompaniment,  villages  are  being 
established  where  before  were  only  slave  cabins,  towns  are 
growing  where  before  were  only  villages,  and  great  cities  are 
amicably  contending  as  to  which  is  the  most  prosperous. 
Yet,  if  there  was  ever  an  instance  of  a  people  beginning  to 
manufacture  under  the  most  discouraging  and  disheartening 
circumstances,  I  know  not  on  what  page  of  the  world's  ex- 
perience it  is  recorded.  Eighteen  years  ago,  the  close  of  the 
war  found  them  with  their  whole  form  of  society  dissolved ; 
their  system  of  laws  uprooted ;  what  they  regarded  as  wealth 
swept  away,  their  credit  ruined,  and  every  incipient  attempt 
to  manufacture  exposed  to  the  sharpest  competition  of  a 
rich,  strong,  and  skillful  section,  fully  equipped  with  the  best 
tools  and  machinery.  But  under  the  "healthy  stimulus  of 
prospective  want,"  and  in  vindication  of  their  right  to  be 
called  Yankees,  the  Southern  people  manfully  met  the  situa- 
tion and  grappled  with  their  problem.  And  to-day  it  is  not 
they  who  have  anything  to  fear  from  the  competition  of  the 
manufacturing  States  of  the  East;  but  it  is  rather  New 
England  which  has  cause  to  tremble,  lest  being  cut  off  by  our 
18 


410  REDUCTION    OF    TARIFF   TAXATION. 

vicious  tariff  from  the  commerce  of  the  world,  she  would  also 
lose  her  home  market,  and  thus  realize  what  England  felt  so 
sorely  before  Sir  Robert  Peel  inaugurated  the  free  trade 
movement,  "when  British  protection,  instead  of  fostering 
home  industries,  had  most  effectually  destroyed  that  trade  by 
reducing  the  entire  population  to  beggary,  destitution,  and 
want."  And  in  further  illustration  of  my  premises,  I  hold 
in  my  hand  for  your  inspection  one  of  the  most  ingenious, 
artistic,  and  attractive  calendars  or  almanacs  for  the  new 
year.  And  where  do  you  imagine  it  came  from  ?  Not  from 
your  well  established  artists  and  printing  works  of  New 
York,  Boston,  and  Philadelphia;  not  from  more  distant 
London  or  Paris;  but  from  Glen  Allan  in  Virginia,  if  any- 
body knows  where  that  is  (for  I  do  not);  and  the  projectors 
and  manufacturers  of  these  cards  were  in  Boston,  New 
York,  Philadelphia,  and  the  cities  of  the  West,  seeking 
orders,  and  challenging  competition,  before  the  local  dealers 
had  got  ready  to  contest  their  own  local  markets. 

Walking  down  Broadway  only  a  few  days  ago,  I  met  a 
gentleman,  whom  I  knew  to  be  a  large  stockholder  and 
director  in  one  of  our  largest,  oldest,  and  most  successful 
establishments  manufacturing  a  chemical  product,  which  is 
in  constant  and  most  extensive  use,  not  only  in  this,  but  in 
all  other  civilized  countries.  After  exchanging  salutations, 
and  in  response  to  the  usual  inquiry,  as  to  what  is  the  news? 
he  told  me  that  he  had  just  come  from  a  meeting  of  his 
board  of  directors,  in  which  the  question  under  discussion 
was,  whether  they  had  not  better  temporarily  close  up  their 
works  and  stop  manufacturing;  for,  he  continued,  we  are 
certainly,  through  excessive  competition  and  market  supply, 
making  no  profit,  and  are  probably  incurring  a  loss  on  every 
day  that  we  now  keep  in  operation.  But  through  great  unwil- 
lingness to  discharge  their  workingmen  at  the  commencement 
of  winter  and  allow  their  machinery  to  stand  idle,  it  was 
resolved,  after  discussion,  to  defer  a  final  decision  until  the 


REDUCTION    OF   TARIFF   TAXATION.  411 

next  monthly  meeting,  with  a  hope  that  in  the  meantime 
something  better  would  happen  as  respects  the  business  out- 
look. Now  I  bring  up  this  case,  because  it  is  a  fair  sample 
of  what  is  occurring  at  this  moment  all  over  the  country. 
There  was  no  very  marked  falling  of!  in  the  demand  for  the 
article  produced.  Civilization  could  not  get  on  without  it; 
and  the  sales  even,  aggregate  thousands  and  hundreds  of 
thousands  of  pounds  daily.  But  more  manufactories  of  it 
have  come  into  existence  in  the  United  States  than  are 
necessary  to  supply  any  domestic  demand  for  their  product; 
and  a  tariff  of  sixty  per  cent,  on  the  importation  of  the 
principal  component  raw  material  or  constituent  used  in  the 
manufacture,  so  enhances  the  price  of  this  finished  article, 
that  not  one  ounce  of  it  can  be  sold  without  loss  in  any 
foreign  country.  Hence  our  manufactories  of  this  specialty 
are  closing;  our  business  is  declining  or  unprofitable,  and 
our  ships  are  deprived  of  an  important  element  of  freight; 
while  England,  which  imposes  no  tax,  either  on  the  raw  or 
finished  product,  supplies  the  latter  in  enormous  quantities 
to  most  other  countries,  and  her  ships  distribute  it. 

The  next  witness  I  will  call  will  be  Howard  M.  Newhall 
of  Lynn,  Massachusetts,  whom  the  Boot  and  Shoe  Reporter 
certifies  to  be  one  of  the  most  enterprising  and  intelligent 
persons  engaged  in  the  shoe  manufacture  in  this  country, 
and  thoroughly  qualified  to  speak  concerning  it.  This 
gentleman  testified  before  a  committee  of  the  Legislature  of 
Massachusetts  in  February  last,  in  respect  to  the  boot  and 
shoe  industry  of  the  country,  "that  no  other  country  knows 
how  or  could  make  shoes  as  fast  and  as  cheap  as  the 
Yankees"  —  the  manufacture  being  more  typically  Ameri- 
can than  any  other,  and  all  the  ingenious  machinery  which 
has  revolutionized  the  lap -stone  and  the  hammer  out  of  exist- 
ence, having  been  of  Yankee  invention.  Under  such  cir- 
cumstances domestic  competition  and  the  capacity  of  supply, 
he  said,  had  so  increased,  that  if  all  our  existing  factories 


412  REDUCTION    OF   TARIFF   TAXATION. 

were  to  work  full  time  for  six  months,  their  product  would 
suffice  to  abundantly  shoe  every  man,  woman,  and  child  in 
the  country  for  a  period  of  a  full  year.  It  is  clear,  there- 
fore, that  to  enable  our  shoe  factories  to  run  continuously 
and  afford  employment  to  their  operatives  all  the  year,  we 
need  some  other  than  the  domestic  market  for  our  shoe 
product.  But  this  we  cannot  have  under  the  existing  tariff, 
which  so  enhances  the  cost  of  the  materials  which  enter, 
into  the  make-up  of  shoes  that  would  sell  most  largely  in 
foreign  markets,  that  all  the  benefits  resulting  from  ingenious 
machinery  and  skilled  workmen  are  completely  neutralized 
and  swept  away;  and  in  illustration  of  this  Mr.  Newhall 
analyzed  before  the  committee  the  components  of  a  pair  of 
shoes  fitted  to  meet  the  requirements  of  a  warm  climate, 
and  for  which  there  is  a  large  demand,  and  which  demand 
Massachusetts  would  like  to  supply,  and  demonstrated  that 
the  cost  of  the  material  entering  into  them  was  enhanced  by 
tariff  taxes  to  the  extent  of  sixty  cents  a  pair  before  the 
work  of  manufacture  even  begins.  And  under  such  cir- 
cumstances there  can  be  no  export  or  foreign  demand  for 
American  shoes,  and  the  American  shoemaker,  no  matter 
what  may  be  the  rate  of  his  wages,  has  been  so  effectually 
protected  that  he  cannot  now  be  positively  certain  of  con- 
tinuous employment  in  his  avocation  for  more  than  a  part 
of  the  year.  And  as  a  further  contribution  to  this  depart- 
ment of  our  tariff  information,  I  would  state  that  Ben 
Butler,  who  poses  as  the  special  friend  of  the  American 
workingman,  was  instrumental  more  than  any  other  person 
in  imposing  a  duty  on  serges  and  lasting  (which  form  a  part 
of  a  large  class  of  shoes),  greater  than  is  imposed  on  silks, 
wines,  laces,  and  diamonds,  and  all  because  Ben  Butler 
thought  he  saw  an  opportunity  under  such  duties  to  make 
money  by  establishing  a  domestic  manufacture  of  such 
materials. 

And  now  my  next  witness  shall  be  Mr.  William  Marshall, 


EEDUCTION    OF   TARIFF   TAXATION.  413 

the  president  of  the  extensive  and  well-known  cordage 
works  of  Brooklyn,  who  informs  me  that  he  exports  cord- 
age of  his  manufacture  to  the  Brazil  and  East  Indies  and 
sells  it  there  for  the  equipment  of  foreign  ships  and  other 
purposes,  at  a  less  price  than  the  American  ship  owner  and 
rigger  can  buy  it  within  a  mile  of  the  factory  where  it  is 
made.  The  explanation  of  this  curious  circumstance  is  that 
the  cordage  is  manufactured  of  imported  raw  materials 
(which  the  country  cannot  produce),  paying  heavy  duties  — 
which  duties  less  ten  per  cent,  are  remitted,  when  the  cord- 
age is  exported  for  foreign  use;  but  are  mercilessly  exacted 
when  the  cordage  is  consumed  at  home.  We  thus  discrimi- 
nate in  respect  to  all  these  products  and  services  in  which 
cordage  enters  as  a  constituent  or  instrument  in  favor  of 
foreigners,  and  to  the  detriment  of  our  own  people. 

Again,  we  formerly  imported  large  quantities  of  gunny 
cloth  from  India  to  be  used  for  the  baling  of  our  cotton. 
No  one  a  few  years  ago  would  have  ever  dreamed  that  we 
could  successfully  make  this  cloth  in  competition  with  the 
natives  of  India,  who  work  for  the  very  lowest  wages  that 
are  anywhere  regularly  paid  for  the  services  of  human 
beings  anywhere  on  the  globe's  surface.  And  yet,  through 
our  invention  and  use  of  machinery  we  have  done  it,  and 
comparatively  little  of  this  cloth  is  now  brought  to  this 
country;  the  Indian  pauper  being  nowhere  in  competition 
with  the  American  iron  spindle  and  shuttle.  But  here, 
again,  as  in  the  boot  and  shoe  industry,  the  facilities  for 
production  have  caused  this  business  to  so  far  outgrow  any 
requirements  for  home  consumption,  that  the  supply  of 
bagging  on  hand  during  the  present  season  has  been  re- 
ported  as  sufficient  to  bale  a  crop  of  cotton  2,000,000  bales 
larger  than  we  have  ever  produced.  And  yet,  such  has 
been  the  general  augmentation  of  the  cost  protection,  that 
any  relief  from  an  exportation  of  this  surplus  has  not  been 
found  practicable. 


414  REDUCTION   OF   TARIFF   TAXATION. 

REMARKABLE     INVESTIGATION     OF     MASSACHUSETTS     INDUSTRIES. 

But  the  most  conclusive  and  unanswerable  demonstration 
of  the  disastrous  and  crippling  influence  of  our  present 
tariff  policy  on  the  labor  and  manufacturing  interests  of 
this  country  is  to  be  found  in  the  last  report  of  the  Massa- 
chusetts Bureau  of  Labor  Statistics ;  which,  although  consti- 
tuting a  contribution  to  economic  science  of  surpassing 
interest,  and  of  such  a  nature  as  ought  to  startle  every  fair- 
minded  American  citizen  who  has  been  educated  to  believe 
that  our  present  high  protective  policy  really  works  for  the 
benefit  of  domestic  labor  and  capital,  has  thus  far,  very 
curiously,  almost  escaped  public  attention.  In  this  report  a 
very  careful  analysis  is  made  of  the  comparative  condition 
of  2,240  manufacturing  establishments  in  Massachusetts, 
representing  twenty-one  different  industries  and  207,798 
employees,  for  the  years  1875  and  1880  respectively;  the 
elements  of  the  analysis  being  the  census  returns  made  to 
the  Federal  and  State  governments  respecting  capital,  labor- 
ers, value  of  stock  used  and  of  product,  cost  of  manage- 
ment, profits,  etc.,  in  the  years  specified,  which  are  acknowl- 
edged to  be  as  reliable  as  such  returns  possibly  can  be,  and 
as  probably  superior  to  any  similar  statistics  ever  before 
collected.  The  2,240  establishments  also  employed  fifty- 
three  per  cent,  of  the  invested  capital,  paid  fifty-eight  per 
cent,  of  wages,  used  fifty-seven  per  cent,  of  the  stock,  and 
produced  fifty-seven  per  cent,  of  the  entire  manufactures  of 
the  State. 

Premising  further  that  Massachusetts  practically  produces 
none  of  the  stock  or  raw  material  which  its  manufactures 
use,  but  buys  almost  everything  from  beyond  her  borders, 
the  investigation  shows  that  the  stock — metals,  fibers,  leather, 
coal,  lumber,  chemicals,  and  the  like — used  in  manufactur- 
ing in  that  State  in  1880,  cost  11.52  per  cent,  more  than  it 
did  in  1875;  and  that  the  manufacturers,  as  the  report 
express  it,  "  counterbalance "  the  result  by  reducing  the 


REDUCTION    OF   TARIFF   TAXATION.  415 

wages  of  tlieir  employees  during  the  period  involved  to  the 
extent,  on  an  average,  of  4.35  per  cent.,  and  by  submitting 
to  a  reduction  of  their  net  profit  of  7.19  per  cent.  Now 
when  it  is  remembered  that,  the  prices  of  manufacturers' 
raw  materials  have  notably  declined  in  all  foreign  competi- 
tive countries  during  the  period  covered  by  the  Massachu- 
setts analysis;  that  the  wages  of  foreign  competitive  labor 
during  the  same  time  have  also  very  generally  advanced; 
and  that,  apart  from  possible  differences  in  the  wages  of 
labor,  Massachusetts  industries,  in  comparison  with  foreign 
industries,  are  not  only  not  subjected  to  any  special  disabil 
ities,  but  on  the  contrary  enjoy  many  advantages — it  seems 
clear  that  the  extraordinary  results  under  consideration  can- 
not be  referred  to  any  other  agency  than  that  of  our  present 
national  fiscal  policy,  which  has  pointed  out,  by  excessive 
taxation  and  restriction  of  exchanges  inevitably  enhanced 
the  cost  of  all  manufactured  commodities  and  their  ele- 
ments. And  in  view  of  this  Massachusetts  experience,  of 
how  small  importance  is  the  question  of  the  wages  and  liv- 
ing of  the  operatives  in  England,  France,  and  Germany,  in 
comparison  with  the  understanding  and  the  correcting  of 
the  influences  which  are  slowly  but  surely  reducing  wages 
and  profits  in  our  home  industries,  restricting  their  area  of 
development,  and  consequently  the  opportunities  for  the 
profitable  employment  of  our  rapidly  increasing  population. 
And  as  pertinent  to  this,  I  would  here  state  that  I  put  the 
question  to  one  of  the  most  distinguished  Germans  who 
participated  in  the  recent  excursion  over  the  Northern 
Pacific  railroad,  as  to  whether  the  recent  adoption  of  the 
high  protective  policy  in  Germany  had  had  the  effect,  as  is 
claimed,  of  increasing  the  wages  of  the  German  people. 
His  answer  was,  that  in  some  departments  of  manufactur- 
ing industry  the  rates  of  wages  had  without  doubt  been 
materially  advanced ;  but,  he  continued,  the  cost  of  living — 
the  price  of  food  and  of  rents,  have  at  the  same  time  ad- 


416  REDUCTION    OF   TARIFF   TAXATION. 

vanced  in  a  greater  ratio;  the  hours  of  labor  have  been 
increased,  the  employers  have  become  more  exacting,  there 
is  less  of  liberty  than  at  any  time  since  1849;  and  there 
never  was  a  time,  when  the  desire  of  the  working  classes  to 
quit  the  fatherland  was  greater  than  at  present;  and  in  con- 
firmation of  this  last  statement,  a  reference  to  the  reports  of 
the  Treasury  will  show  that  the  proportion  of  immigration 
into  the  United  States  is  now  and  for  the  last  few  years  has 
been  very  much  greater  than  even  from  oppressed  Ireland, 
or  from  any  other  country — for  the  year  1882,  250,000  out 
of  a  total  of  788,000. 

INDUSTRIAL    CONDITION   OF    FOREIGN   COUNTRIES. 

I  am  perfectly  well  aware  that  the  complaint  of  overpro- 
duction, restricted  markets  and  no  profits  in  business,  by 
reason  of  excessive  competition,  is  at  this  time  general  in  all 
commercial  countries,  and  especially  in  Great  Britain,  where 
protection  as  an  element  of  disturbance  is  wanting;  and 
that,  therefore,  the  reference  I  have  here  made  of  the  exist- 
ing unsatisfactory  state  of  affairs  in  the  United  States  to 
our  national  fiscal  policy  may  seem  to  not  a  few  to  be  un- 
sound both  in  respect  to  facts  and  logic.  That  there  have 
been  great  disturbances  in  the  work  of  production  and 
exchange  of  most  countries  in  recent  years,  and  taking  the 
world  throughout,  most  notably  since  1873,  and  that  these 
disturbances  still  continue,  is  not  to  be  denied.  But  it  is 
now  very  well  recognized  that  the  explanation  of  these 
phenomena  is  to  be  mainly  found  in  the  wonderful  changes 
which,  through  invention  and  discovery,  have  recently  taken 
place  in  the  world's  method  of  doing  its  work  of  production 
and  distribution.  And  that  these  changes  have  been  accom- 
panied with  immense  losses  of  capital  and  great  disturbances 
of  labor,  in  which  the  United  States  has  participated  and 
suffered  in  common  with  other  countries.  That  their  ulti- 
mate outcome,  however,  is  to  be  good,  cannot  be  doubled,- 


REDUCTION    OF   TARIFF   TAXATION.  417 


for,  by  nn  economic  law  which  Mr.  Atkinson  of  Boston, 
more  than  others,  has  recognized  and  formulated,  all  mate- 
rial progress  is  effected  through  the  destruction  of  capital 
by  invention  and  discovery,  and  that  the  rapidity  of  such 
destruction  is  the  best  indicator  of  the  rapidity  of  progress. 
But  in  the  readjustment  by  nations  of  their  industries  to 
the  new  circumstances,  which  is  still  going  on  and  is  yet 
very  far  from  complete,  the  "law  of  the  survival  of  the 
fittest"  is  going  to  as  fully  assert  itself,  as  it  has  been  proved 
to  do  in  the  organic  world;  and  in  this  struggle  the  United 
States,  by  reason  of  possessing,  as  no  other  nation  does,  the 
conditions  for  the  cheapest  production  of  the  great  staple 
commodities  of  the  world's  consumption,  ought  to  prove 
itself  the  fittest,  and  dominate  in  "manufactures"  as  it  now 
dominates  in  respect  to  the  production  of  cotton  and  food 
products.  Why  such  a  result  has  not  yet  been  attained; 
why  in  the  readjustment  of  industries  to  the  new  conditions, 
the  United  States  suffers  disproportionately,  or  even  as 
much  as  her  chief  industrial  competitor,  Great  Britain;  and 
why  under  the  present  national  fiscal  policy,  there  is  little 
chance  for  improvement — finds  a  sufficient  explanation  and 
answer  in  the  results  of  the  Massachusetts  industrial  investi- 
gation before  referred  to,  even  without  taking  into  account 
a  vast  amount  of  other  corresponding  and  confirmatory 
evidence.  Great  Britain  moreover  is  not  suffering  industri- 
ally as  is  the  United  States.  It  is  true  that  in  many  depart- 
ments of  her  industries  there  is  a  complaint  that  trade  is 
extremely  dull.  But  there  is  no  such  suspension  of  great 
departments  of  industry  in  Great  Britain  as  in  this  country. 
Her  export  trade  if  dull,  goes  on  uninterruptedly  all  the 
year.  Her  immense  exportation  of  manufactured  products 
shows  no  diminution,  but  a  continued  increase.  Her  ships 
multiply  upon  the  ocean.  The  condition  of  her  operatives 
is  steadily  improving;  and  when  the  managers  of  the  recent 
Industrial  Exposition  at  Boston,  just  closed,  made  applica- 
18* 


418  REDUCTION    OF    TARIFF   TAXATION. 

tion  to  the  great  English  machine  works  of  Manchester  to 
send  samples  of  their  machinery  for  exhibition,  with  a  pros- 
pect of  thereby  increasing  their  orders,  they  obtained  from 
all  of  them  substantially  this  answer:  that  they  had  no 
unsold  machinery  to  sell,  and  were  too  busy  in  supplying 
positive  orders,  to  spend  any  time  to  prepare  anything  for 
exposition  and  prospective  sales  in  the  United  States. 

NO    MATERIAL    REDUCTIONS    OF    FEDERAL    TAXATION    YET 
EFFECTED. 

The  most  urgent  necessity  of  the  hour  is,  therefore,  speedy 
large  reduction  of  Federal  taxation — or  as  my  friend  Mr. 
James  S.  Moore,  the  Parsee  merchant,  has  happily  expressed 
it,  "no  further  maintenance  of  war-taxes  in  time  of  peace." 

And  in  making  these  reductions  it  seems  but  the  dictates 
of  common  sense  that  those  taxes  should  be  first  and  specially 
selected  for  repeal  which  increase  the  cost  of  manufacturing 
production  and  of  the  living  of  the  people,  and  not  those 
which  will  cheapen  the  cost  of  whisky  and  tobacco — two 
articles  which  in  respect  to  living  are  regarded  as  luxuries, 
if  not  harmful,  and  only  one  of  which  enters  to  any  extent  as 
an  element  in  other  forms  of  production.  Thus  far,  although 
pretense  is  made  to  the  contrary,  there  -has  been  really  no 
great  or  reasonable  abatement  in  the  burdens  of  national 
taxation,  especially  under  the  tariff.  It  was  claimed  by  Mr. 
Morrill  and  other  prominent  protectionists  that  the  effect  of 
the  new  tariff  schedules  would  reduce  the  revenues  from 
customs  by  about  $35,000,000,  and  the  average  rates  of  duty 
fifteen  or  a  greater  percentage.  Four  months  of  the  present 
fiscal  year  have  now  elapsed,  and  the  results  show  that  the 
reductions  of  the  revenues  from  the  customs  will  not  be  in 
excess  of  fifteen  millions,  and  that  the  average  rates  actually 
assessed  and  collected  on  dutiable  imports  during  this  period 
have  been  41.95  per  cent.,  or  only  one  and  a  half  per  centum 
less  than  prevailed  in  1882,  or  before  the  pretended  tariff 


REDUCTION    OF   TARIFF   TAXATION.  419 

reductions  of  March,  last  were  placed  upon  the  statute  book. 
So  that  the  country  still  enjoys  the  blessings  of  a  forty  per 
cent,  tariff  on  all  dutiable  imports,  and  the  surplus  revenue 
of  the  Treasury  for  the  present  fiscal  year  will  probably  be 
not  less  than  a  hundred  million  of  dollars,  and  may  consid- 
erably exceed  this  figure. 

THE    TWO  POLICIES    IN    RESPECT    TO  THE    REDUCTION    OF   FEDERAL 
TAXATION   AND    THEIR   PROSPECTIVE    RESULTS. 

That  public  sympathy  is  all  but  unanimously  in  favor  of 
further  large  and  speedy  reductions  of  federal  taxes  cannot 
be  doubted.  But  at  the  same  time  there  are  serious  differ- 
ences  of  opinion  as  to  the  departments  of  the  revenue  in 
which  the  taxes  should  be  abated.  The  representatives  of 
the  high  protective  policy  are  earnest  in  their  protests  against 
any  further  abatements  of  the  tariff,  and  are  certain  that 
further  reduction  of  duties  would  not  result  in  great  reduc- 
tions of  wages  and  the  destruction  of  American  industries; 
and,  in  order  to  prevent  such  legislation,  are  willing  to 
exempt  rum  and  tobacco  from  all  taxation,  to  vote  for  new 
and  largely  increased  governmental  expenditures,  and  to 
even  keep  up  high  taxes  for  the  purpose  of  distributing  a 
large  annual  resultant  revenue  back  again  to  the  people. 
The  question  at  issue  is,  however,  an  eminently  practical  one; 
which  ought  to  be  discussed  and  decided  from  the  standpoint 
of  the  nation's  necessities  and  experiences,  and  without  any 
reference  to  the  theories  of  either  protection  or  free  trade. 
If  the  decision  is  in  favor  of  allowing  the  tariff  to  remain 
unchanged,  then  abundant  experience  teaches  that  the  nation 
will  have  substantially  no  market  for  its  manufactured 
product  except  a  home  market;  that  the  growth  of  our 
industries  will  be  restricted  and  limited,  and  that  there  will 
be  a  reduction  in  the  wages  of  its  labor,  and  no  accompany- 
ing reduction  in  the  cost  of  its  living.  On  the  other  hand, 
a  reduction  of  the  tariff  means  the  inauguration  of  a  new 


420  REDUCTION    OP   TARIFF   TAXATION. 

and  grand  commercial  policy  worthy  of  our  industrial 
strength  and  resources  as  a  nation.  It  means  free  access  to 
a  thousand  millions  of  people  as  our  customers,  in  place  of 
our  home  population  of  56,000,000 — which  latter  number, 
large  as  it  is  absolutely,  is  altogether  too  small  and  insignifi- 
cant for  our  present  and  prospective  capacity  of  supply. 

THE   PRESENT    MOST    INJURIOUS    EFFECT  OF    THE    HIGH    TARIFF. 

In  discussing  the  tariff  heretofore  the  opponents  of  pro- 
tection have  been  accustomed  to  consider  the  enhancement 
of  prices  to  the  consumers  as  the  greatest  evil  which  this 
policy  entails;  and  are  able  to  now,  more  than  ever,  substan- 
tiate their  position  by  pointing  on  the  one  hand  to  the 
enormous  maintenance  in  prices  which  followed  imposition 
of  a  100  per  cent,  tariff  on  the  importation  of  Bessemer  steel 
rails;  and  the  reduction  in  the  price  of  matches  and  quinine, 
which  followed  the  removal  of  taxes  and  duties  from  these 
articles — from  two  dollars  to  seventy-five  cents  a  gross  in  the 
one  case,  and  to  the  extent  of  about  three-eighths  in  the  other; 
to  which  might  further  be  added  in  the  way  of  illustration  that 
while,  with  a  continuance  of  the  protection  and  taxes  in  the 
Bessemer  steel  rail  case,  the  mills  are  stopping,  and  the  pro- 
duction has  become  unprofitable  through  over-supply  and 
excessive  competition,  the  reduction  of  taxes  and  prices  in 
the  case  of  matches  and  quinine,  has  been  followed  by  a 
larger  consumption  and  a  more  active  manufacture  than 
ever.  But  great  and  injurious  as  is  this  burden  of  the 
present  high  tariff,  and  I  would  not  underrate  it,  the  tariff 
works  at  present  a  far  greater  injury  in  restricting  our 
industrial  growth  and  preventing  us  from  obtaining  a 
market  for  our  surplus  production.  We  are  rich,  and,  as 
experience  has  abundantly  taught  us,  can  stand  a  heavy 
imposition  of  taxes.  But  we  cannot  stand  a  stagnation  and 
curtailment  of  business.  To  understand  this  proposition 
more  clearly,  let  us  reason  about  it  a  little. 


REDUCTION    OF   TARIFF   TAXATION.  421 

The  burden  or  injurious  effect  of  a  tax  is  not  to  be  meas- 
ured by  the  ratio  which  the  tax  may  bear  to  the  gross  value 
of  the  thing  taxed,  but  by  the  proportion  which  the  tax 
bears  to  the  profit  which  might  be  made  by  undertaking  a 
certain  production.  To  practically  illustrate  this,  let  us  take 
an  example;  let  us  suppose  two  men,  A  and  B,  to  start 
machine  shops,  each  with  a  capital  of  $20,000;  and  that 
each  in  his  operations  expends  $20,000  for  coal  and  iron, 
$40,000  in  wages,  and  $2,000  per  annum  for  transportation 
to  the  shops  of  the  raw  material.  The  total  costs  of  the 
annual  product  of  each  shop  will  be  $64,000,  and  a  sale  of 
the  product  at  the  net  price  of  $66,000  will  yield  the  owner 
$2,000,  or  ten  per  cent,  on  his  capital,  and  all  will  be  pros- 
perous. Now,  suppose  further,  that  under  such  conditions 
A  has  a  tax  imposed  upon  him  of  three  and  one-third  per 
cent,  on  his  product — it  may  be  a  custom  or  an  internal  rev- 
enue tax,  or  an  increased  rate  of  railroad  freight.  This 
amounts  to  $2,000  on  $64,000  of  product;  no  great  burden, 
you  will  say:  and  only  requires  him  to  sell  his  $66,000  for 
$2,000  additional.  But  suppose  he  cannot  get  this  $2,000 
additional,  and  he  certainly  cannot  if  the  other  man,  B,  is 
exempt  from  this  three  and  one-third  per  cent,  tax,  and  com- 
petes with  A  in  the  open  market.  Then  this  three  and  one- 
third  per  cent,  upon  product  becomes  ten  per  cent,  upon  the 
investment,  and  entirely  absorbs  all  profit,  so  that  the  busi- 
ness of  A  first  drags,  then  stagnates,  and  is  finally  abandoned; 
while  his  workmen  are  discharged,  the  village  where  his 
shop  may  be  situated  runs  down,  and  railroads,  artisans, 
shop-keepers,  and  professional  men  complain  of  hard  times, 
and  in  turn  decrease  their  expenditures.  B,  on  the  other 
hand,  exempt  from  the  tax,  keeps  on  working,  and  when 
hard  times  come  continues  his  sales  and  occupation  to  his 
workmen  by  taking  five  per  cent,  profit  in  place  of  ten,  and 
selling  his  goods,  as  he  can  afford  to,  at  a  reduced  price. 
Now  one  result  of  the  new  inventions  for  annihilating  time 


422  REDUCTION    OF   TARIFF   TAXATION. 

and  space  is,  that  for  purposes  of  trade  and  commerce  the 
world  has  become  practically  one,  and  profits  at  wholesale 
are  limited,  and  trade  turns  upon  the  smallest  percentages — 
a  quarter  of  a  cent  a  yard,  a  cent  a  bushel,  and  a  mill  a 
pound — and  if  a  duty  is  imposed  upon  any  article  of  foreign 
product  which,  enters  into  the  processes  of  domestic  industry, 
and  directly  or  indirectly  increases  the  cost  thereof  by  the 
measure  of  these  small  percentages  (and  under  the  tariff  we 
talk  of  twenty,  forty,  and  even  100  per  cent,  taxes),  then  all 
foreign  sales  of  the  products  of  such  industries  will  be  simply 
impossible.  This  explanation  also  explains  why  the  first 
tentative  measures  of  tariff  reform,  instituted  by  Sir  Robert 
Peel  in  1842  and  1845,  which  consisted  mainly  in  the 
removal  of  numerous  small  but  obstructive  tariff  duties,  set 
British  manufactures  and  industries  forward  by  leaps  and 
bounds,  even  before  the  greater  burden  of  the  corn  laws  was 
removed  in  1845.  And  so  undeniable  and  apparent  were 
the  benefits  flowing  from  these  originally  comparatively 
small  measures  of  British  tariff  reform  that  those  who  in  the 
outset  gave  an  unwilling  support  to  Sir  Robert  Peel,  or 
openly  opposed  him,  in  a  few  short  years  became  his  most 
earnest  supporters,  and  urgently  demanded  more.  And  so, 
I  a  in  convinced,  will  be  the  experience  of  this  country,  if  it 
now  cautiously,  tentatively,  and  intelligently  moves  on  in  the 
work  of  tariff  reductions  and  reform.  For  on  its  face  what 
can  be  more  preposterous  and  absurd  than  the  assertion  that 
a  people  can  be  made  prosperous  by  taxation — that  is,  by 
arbitrarily  taking  something  away  from  them. 

As  further  illustrating  the  probable  beneficial  effects  of  a 
reduction  of  the  tariff,  I  cannot  forbear  giving  the  personal 
testimony  of  two  gentlemen  who  certainly,  up  to  this  time, 
have  been  regarded  as  worthy  of  all  credence  by  the  advo- 
cates of  the  policy  of  high  duties. 


REDUCTION    OF   TARIFF   TAXATION.  423 

EFFECT  OF  THE  REDUCTION  OF  THE   TARIFF  ON  SHIP  BUILDING 

— JOHN  ROACH'S  OPINION. 

It  was  my  pleasant  fortune  to  have  a  lengthy  interview 
last  spring  with  John  Roach — a  man  for  whose  enterprise 
and  skill  in  his  profession  I  entertain  the  greatest  respect. 
As  was  to  be  expected,  the  tariff  in  relation  to  ship  building 
came  up  for  discussion;  and  John,  as  usual,  dwelt  long  and 
earnestly  upon  the  enormous  differences  in  the  wages  paid 
in  his  ship-yards  and  upon  the  Clyde — and,  as  near  as  I  can 
remember,  he  figured  out  his  nominal  disadvantage  in  this 
respect  to  be  about  seventy  per  cent.  "  But,"  he  continued, 
"  my  men  work  mainly  by  the  piece,  and  have  such  an  oppor- 
tunity and  incentive  in  so  doing  to  augment  their  wages, 
that  they  have  invented  and  practice  all  manner  of  devices 
for  economizing  and  perfecting  their  labor;  so  much  so,  that 
foreign  ship  builders  who  visit  my  yards  are  astonished  at 
the  amount  and  excellence  of  the  work  we  are  able  to  turn 
out  in  a  given  time:  and  we  have  thus  been  enabled  to  so  far 
overcome  the  difference  in  wages  that  I  really  do  not  believe 
the  Englishmen  have  at  present  more  than  thirty  per  cent,  the 
advantage  over  us  in  the  cost  of  their  labor."  "  "Well,  it  seems 
tome,  Mr.  Roach,"  I  replied,  "  that  in  making  this  admis- 
sion, you  give  up  your  whole  case  as  a  protectionist;  for  the 
materials  which  you  employ  in  constructing  your  own  vessels 
are  augmented  in  price  to  a  greater  extent  than  thirty  per 
cent,  by  reason  of  the  tariff;  and  if  through  a  remission  of 
duties  you  could  buy  these  materials  as  cheap  in  Delaware 
as  upon  the  Clyde,  you  could  still  afford  to  pay  your  work- 
men the  same  wages  and  bid  defiance  to  all  foreign  competi- 
tion." "I  really  believe  we  could;  I  really  believe  we 
could,"  was  the  instant  rejoinder;  "for,  what  these  protec- 
tionists " — prefacing  the  word  protectionists  with  an  exple- 
tive more  forcible  than  polite — "  give  me  with  one  hand, 
they  more  than  take  away  with  the  other."  Whether  John 
Roach  would  now  think  it  politic  to  remember  this  conversa- 


424  REDUCTION    OP   TARIFF   TAXATION. 

tion  I  do  not  know;  but  nevertheless  I  feel  confident  that  it 
represents  his  real  sentiments. 

THE    EFFECT    OF   THIS   EEPEAL   OF   THE   DUTIES    ON   WOOL. 

Again,  the  wool  growers  of  Ohio  and  some  other  parts  of 
the  country  are  much  disgruntled  at  the  trifling  reduction 
made  last  winter  in  the  duties  on  wool,  which,  by  the  way, 
fell  mainly  on  carpet  wools,  which  we  never  have  grown  and 
could  not  be  induced  to  grow  in  this  country — and  a  motion 
will  undoubtedly  be  made  early  in  the  coming  session  to  put 
back  this  wool  tariff  to  its  old  figures.  Meeting  a  few  days 
since  George  William  Bond  of  Boston,  the  highest  authority 
on  wool  in  this  country,  the  expert  relied  upon  by  the  Treasury 
to  fix  the  grades  and  the  prices  of  wool  for  the  custom's 
service,  and  a  gentleman  who  has  always  had  the  confidence 
of  the  protectionists,  I  put  to  him  the  question,  as  to  what 
effect  a  complete  abolition  of  the  duties  on  wool  would  have 
on  the  interests  of  the  American  wool  growers  and  woolen 
manufacturers.  He- replied  that  he  had  recently  given  to 
Mr.  A.  M.  Garland  of  Ohio,  late  president  of  the  American 
Wool  Growers'  Association  and  a  member  of  the  late  tariff 
commission,  an  answer  in  writing  to  substantially  the  same 
question;  at  the  same  time  offering  me  a  copy  of  the  latter, 
with  permission  to  make  such  use  of  it  as  I  might  deem  ex- 
pedient. And  as  Mr.  Garland,  for  obvious  reasons,  does  not 
seem  to  have  given  the  public  a  chance  to  see  this  important 
letter,  I  do  not  think  I  can  do  better  than  to  here  make 
known  the  most  essential  portions  of  it. 

Mr.  Bond  begins  his  letter  by  saying  "  that  high  duties  on 
wool  are  now  maintained  as  a  bounty  to  States  which  raise 
comparatively  a  small  part  of  the  clip,  for  the  rest  do  not  re- 
quire it.  The  oft-repeated  claim  that  the  United  States 
should  raise  all  the  wool  she  consumes  is  folly.  You  ask,  at 
what  point  does  any  tariff  on  wool  begin  to  affect  the  price 
of  the  domestic  clip  ?  "  I  should  say  at  that  point  which 


REDUCTION    OF   TARIFF   TAXATION.  425 

shuts  us  out  from  the  competition  of  the  world,  so  that  we 
are  restricted  in  the  range  of  our  manufactures.  Our  fine 
wools  have  always  been  higher,  other  things  being  equal, 
when  we  were  able  freely  to  import  the  wools  of  other  coun- 
tries at  a  low  duty,  or  at  no  duty  at  all.  When  the  tariff  of 
1857  was  passed,  fine  wools  became  virtually  free,  so  that 
we  went  into  full,  or  nearly  full,  competition  with  Europe. 
What  was  the  effect  ?  Wools  advanced  immediately  in  the 
markets  of  production  abroad  twenty -five  to  thirty -three  and 
one-third  per  cent.,  so  that  we  got  them  no  cheaper  than  be- 
fore, and  the  prices  of  domestic  wools  advanced.  Now,  this 
was  an  advantage  to  our  manufacturers,  as  it  enhanced  the 
cost  to  the  foreign  manufacturers,  so  that  ours  could  well 
afford  to  pay  the  advanced  prices.  Reduced  to  gold,  the 
average-  prices  of  wool  have  been  lower  under  the  tariff  of 
1867  than  they  were  under  that  of  1857,  and  I  believe  that, 
if  wools  were  to  be  made  free  to-day,  there  would  be  no 
material  decline  in  the  value  of  our  fine  American  wools. 
Thus  we  see  that,  by  exacting  a  duty  which  shuts  us  out 
from  competition  in  the  world's  markets,  we  give  our  compet- 
itors the  raw  material  enough  lower  to  materially  lessen  the 
protection  afforded  by  the  duty  on  the  manufactured  article. " 

Fickle  fashion  is  so  changeable  that  protection  cannot 
always  protect  our  fine  wools: 

"The  present  indications  are  that  goods  with  finished  face 
will  soon  again  be  in  fashion.  As  yet,  we  have  found  almost 
no  wools  in  this  country  adapted  to  this  manufacture.  We 
shall  again  be  obliged  to  import,  and  if  the  tariff  should  be 
too  high  to  allow  of  that,  many  of  our  mills  must  be  closed, 
tor  the  people  will  follow  the  fashion.  Should  this  come, 
you  may  look  again  for  a  decline  in  the  bulk  of  the  wools  of 
this  country.  Looking  to  the  general  interests  of  wool  grow- 
ing in  this  country,  I  believe — and  this  from  a  careful  study 
of  the  wool  manufacture,  its  successes,  its  failures,  and  vicis- 
situdes— that  the  lower  the  duties  are  upon  wool,  and  the 


426  REDUCTION    OF   TARIFF   TAXATION. 

closer  to  the  absolute  requirements  under  the  greatest  appli- 
cation  of  skill  and  energy,  is  the  protective  duty  upon  the 
manufactures,  the  greater  will  be  the  success  of  these  two 
great  interests. 

u  You  and  your  friends  will  not  probably  agree  with  me  in 
these  views,  but  they  are  the  results  of  fifty  years'  study  and 
experience.  Yours  very  truly, 

«GEO.  WM.  BOND." 

THE  NECESSITY  OF  THE  HOUR, 

The  pressing  necessity  of  the  hour,  therefore,  with  us,  as 
I  again  repeat,  is  a  reduction  of  tariff  taxes,  with  a  view  and 
certainty  of  obtaining  thereby  an  extension  of  markets  for 
our  products,  and  in  default  thereof  we  are  certain  to  be 
smothered  in  our  own  grease.  But  how  shall  we  secure  the 
extension  of  markets  and  thereby  continued  national  develop- 
ment and  prosperity  ?  Certainly  it  will  not  be  through  fur- 
ther bounties,  subsidies,  restrictions,  fine-spun  legislative 
contrivances,  or  appeals  to  patriotism  and  the  talk  of  the 
fathers.  All  this  is  only  more  hair  of  the  same  dog  that  has 
heretofore  afflicted  us.  Neither  do  we  need  more  brains — 
Congress  excepted — or  courage,  or  capital,  or  intelligent 
laborers,  for  none  of  these  have  ever  been  lacking  in  Amer- 
ica, when  a  fair  chance  offered  for  their  employment.  But 
what  we  do  want  is  more  liberty — liberty  for  labor  and  cap- 
ital alike  to  buy  where  and  what  they  want,  and  sell  where 
and  when  they  please,  without  the  interference  of  the  legis- 
lature, or  of  any  interested  capitalists  who  may  try  to  influ- 
ence legislation;  and  unless  the  country  can  have  such  a  de- 
gree of  freedom,  all  other  remedies  will  be  useless.  But, 
on  the  other  hand,  with  production  and  exchange  freed  from 
all  artificial  burdens  and  restrictions,  save  such  as  an  econo- 
mical administration  of  the  State  may  find  necessary  to  im- 
pose for  the  sake  of  revenue ;  this  nation  will,  I  feel  assured, 
speedily  attain  to  such  a  supremacy  in  the  world's  commerce. 


REDUCTION    OF    TARIFF   TAXATION.  427 

and  to  such  a  degree  of  domestic  prosperity  and  abundance 
as  has  hardly  yet  been  dreamed  of  by  the  most  sanguine  of 
our  countrymen. 

And  as  showing  that  intelligent  and  far-seeing  English- 
men foresee  that  such  may  be  the  result  if  we  once  fairly 
abandon  our  narrow,  illiberal,  worse  than  old  Chinese  policy, 
and  dread  our  competition  in  the  world's  market  under  such 
circumstances^  I  will  read  to  you  an  extract  from  a  letter 
addressed  to  me  under  date  of  August  last,  from  one  of  the 
leading  railroad  authorities  in  Great  Britain — the  projector, 
in  fact,  of  the  proposed  tunnel  under  the  Straits  of  Dover — 
to  whom  I  sent  some  free  trade  publications.  "I  have  read," 
he  says,  "  your  two  brochures  with  pleasure.  But  as  an 
Islander,  I  have  never  been  an  enthusiastic  well-wisher  for 
free- trade  in  the  United  States.  For  when  you  throw  over- 
board the  burden  of  monopoly  and  walk  straight  out  into 
the  free  world  of  industry  unweighted,  then  'Bull'  must 
look  out.  It  will  be  a  grand  day  for  you;  but  after  five 
years,  a  sad  day  for  « Bull.'  So  keep  up  restrictions  as  long 
as  you  like,  say  I.  Save  that  one  would  like — as  an  old 
pioneer  for  commercial  freedom  in  1833 — to  see  English- 
speaking  people  all  over  the  world  with  one  free-trade  tariff, 
if  only  to  show  to  all  nations  that  all  sorts  of  freedom  spoke 
from  that  tongue  of  their  forefathers.'7 


CHAPTER  XXIV. 

VIEWS  OF  PRESIDENT  LINCOLN.* 


CLINTON,  October  11,  1859. 

DR.  EDWARD  WALLACE:— My  Dear  Sir :— I  am 
here  just  now,  attending  court.  Yesterday,  before 
I  left  Springfield,  your  brother  [Dr.  Wm.  S.  Wallace]  showed 
me  a  letter  of  yours,  in  which  .you  kindly  mention  my 
name,  inquire  my  tariff  views,  and  suggest  the  propriety 
of  my  writing  a  letter  upon  the  subject.  I  was  an  old 
Henry-Clay-Tariff  Whig.  In  old  times  I  made  more 
speeches  on  that  subject  than  on  any  other.  I  have  not 
since  changed  my  views.  I  believe  yet  if  we  could  toave 
a  moderate,  carefully-adjusted,  protective  tariff,  so  far 
acquiesced  in  as  not  to  be  a  perpetual  subject  of  political 
strife,  squabbles,  changes,  and  uncertainties,  it  would  be 
better  for  us.  Still,  it  is  my  opinion,  that  just  now  the 
revival  of  that  question  will  not  advance  the  cause  itself, 
or  the  man  who  revives  it. 

I  have  not  thought  much  on  the  subject  recently;  but  my 
general  impression  is  that  the  necessity  of  a  protective  tariff 
will  ere  long  force  its  old  opponents  to  take  it  up;  and  then 
its  old  friends  can  join  in  and  establish  it  on  a  more  firm  and 
durable  basis.  We,  the  old  Whigs,  have  been  entirely 
beaten  out  on  the  tariff  question;  and  we  shall  not  be  able 
to  re-establish  the  policy  until  the  absence  of  it  shall  have 
demonstrated  the  necessity  for  it  in  the  minds  of  men  here* 
tof ore  opposed  to  it.  With  this  view  I  should  prefer  to  not 
now  write  a  public  letter  upon  the  subject.  1  therefore  wish 
this  to  be  considered  confidential. 

I  shall  be  very  glad  to  receive  a  letter  from  you. 

Yours  truly,  A.  LINCOLN. 

*Lawsori's  Life  of  Lincoln. 

(428) 


CHAPTER  XXV. 

THE  TARIFF. 

BY  HON.  JOHN  RANDOLPH  TUCKER, 
Of  Virginia,  in  the  House  of  Representatives,  Friday,  May  5,  1882. 


MR.  CHAIRMAN  :  The  subject  involved  in  the  discus- 
sion upon  this  bill  is  of  all  others  now  challenging 
public  attention  the  most  important,  and  one  of  the  most 
difficult  of  practical  solution.  The  fiscal  action  of  this  Gov- 
ernment and  of  all  governments — by  which  I  mean  the 
raising  of  revenue  and  its  appropriation  for  the  expenses  of 
government — is  necessarily  unequal  in  its  operation  and 
effects.  There  is  a  large  class  of  people  who  pay  more  into 
the  Treasury  than  they  ever  get  back  from  it;  and  there  is 
a  large  class  who  get  more  out  of  the  Treasury  than  they 
ever  put  into  it. 

The  effect  of  this  exaction  and  appropriation  is,  that  there 
is  in  every  country  a  tax-consuming  class  and  a  tax-paying 
class.  Therefore,  it  should  be  the  policy  of  all  good  gov- 
ernments to  confine  within  the  narrowest  bounds  consistently 
with  the  needs  of  the  public  service  this  fiscal  action  of  the 
Government,  because  it  must  necessarily  operate  unequally 
in  the  distribution  of  benefits  and  burdens. 

But  in  the  character  of  our  own  revenue  system  there  is 
a  most  unpleasant  tendency  to  irresponsibility  for  expendi- 
ture as  well  as  for  taxation.  Our  whole  system  of  taxation 
by  the  Federal  Government  is  indirect  in  its  character;  and 
therefore  taxation  and  expenditures  are  felt  very  little  by 

(429) 


430  THE   TARIFF — TUCKER. 

the  people,  the  consequence  of  which  is  that  the  Government 
may  lavish  enormous  revenues  upon  its  favorite  projects, 
and  the  people  be  all  unconscious  that  they  are  paying  any 
taxes  to  meet  these  expenditures. 

Now,  how  we  are  to  apportion  the  $300,000,000  of  revenue 
needed  for  the  Government  among  50,000,000  of  people, 
making  on  the  average  six  dollars  per  capita  or  thirty  dollars 
to  the  family  of  five  persons;  how  we  are  to  adjust  this 
burden  upon  the  people  for  the  necessities  of  the  Govern- 
ment; how  to  lay  our  taxes  with  justice  and  with  the  least 
oppression,  so  as  to  bear  in  due  proportion  to  the  ability  of 
each  citizen,  rich  or  poor,  to  pay,  is  one  of  the  most  impor- 
tant and  difficult  problems  of  government. 

Taxation  is  a  branch  of  what  the  law  writers  call  u  eminent 
domain  "  ;  that  is,  the  supreme  domain  which  government 
has  over  the  property  of  the  citizen  or  over  his  person,  when 
either  is  needed  for  a  "public  use."  Man  and  his  property 
may  be  commanded  by  government  for  a  "public  use"  ; 
that  is,  for  a  purpose  which  concerns  all  as  members  of 
society,  and  gives  benefit  to  the  party  subjected  to  this 
power,  in  common  with  all  others.  It  must  be  a  public  use, 
as  distinguished  from  a  private  benefit. 

But  government  cannot  take  private  property,  even  for 
a  public  use,  without  just  compensation.  This  principle, 
canonized  in  Magna  Charta  six  centuries  ago,  is  a  part  of 
the  fifth  amendment  of  the  Constitution  of  the  United  States. 

Taxation  exacts  the  property  of  the  citizen  for  public  use. 
It  does  not,  it  cannot,  give  him  compensation  for  this,  for 
that  would  be  to  give  him  back  what  it  had  just  exacted, 
which  would  make  nugatory  the  power  of  taxation.  The 
just  compensation  which  each  citizen  thus  contributing  of 
his  means  to  the  support  of  government  receives  is  in  the 
equal  benefits  which  he  derives  in  common  with  all  others 
from  the  beneficent  action  of  the  government  for  the  safety 
and  well  being  of  the  whole  people. 


THE    TARIFF — TUCKER.  431 


Now,  to  take  property  for  public  use  without  just  com. 
pensation  is  clearly  unconstitutional.  To  take  it  for  private 
use,  even  on  just  compensation,  is  as  clearly  unconstitutional. 
It  assails  the  manhood  of  the  citizen  to  take  what  he  has 
earned  for  the  private  use  of  another.  This  is  tribute 
exacted  for  the  support  of  privilege.  Take  it  for  a  public 
use,  on^just  compensation,  and  it  is  right.  But  to  take  it 
for  public  use  without  compensation,  or  for  private  use,  even 
on  just  compensation,  is  to  violate  the  liberty  of  the  man  in 
his  self -use,  and  his  right  to  hold  aft  he  earns  against  men 
and  government,  except  for  the  common  benefit  of  society. 

Taxation  exacts  property  for  public  use  without  any  com- 
pensation but  the  common  benefit.  Bearing  a  common 
burden,  the  citizen  must  derive  a  common  benefit.  When 
revenue  is  needed,  it  is  his  contribution  to  the  common  fund 
for  a  common  benefit,  but  when  taxation  is  laid,  except  for 
the  revenue  needed  by  the  Government,  when  it  takes  the 
property  of  A  to  give  it  to  B,  when  it  exacts  a  tribute  from 
one  to  bestow  a  bounty  on  another,  this  violates  right  and 
justice,  this  lays  burdens  on  one  to  create  a  privilege  for 
another,  this  is  despotism  and  tyranny;  for  if  when  com- 
pensation "be  given  it  is  unconstitutional  to  take  A's  property 
for  private  purposes,  a  fortiori  it  is  unconstitutional  to  tax 
A  for  B's  benefit  without  compensation.  When,  therefore, 
the  tax  power  is  exerted  to  raise  revenue  for  the  Govern- 
ment it  is  just  and  legitimate,  but  when  it  is  perverted  from 
the  purpose  of  revenue  to  the  grant  of  a  bounty  or  special 
privilege  to  a  man  or  a  class,  if  done  directly  it  is  a  robbery; 
if  indirectly,  it  is  a  fraud,  under  forms  of  law.  It  is  no 
longer  for  the  use  of  Government,  but  a  bounty  exacted 
from  the  citizen  to  maintain  a  privileged  class.  This  is 
despotism  and  tyranny. 

Taxation  for  revenue  only  is  therefore  a  fundamental 
maxim  of  all  true  liberty!  Taxation  perverted  from  this 
purpose  to  the  object  ,of  so-called  protection  to  any  class, 


482  THE   TARIFF — TUCKER. 

directly  or  indirectly,  is  not  only  illegitimate  but  a  violation 
of  right  and  justice,  and,  in  my  judgment,  contrary  to  the 
spirit  of  the  Constitution. 

Now,  I  advance  another  step  and  affirm  that  all  taxation 
should  be  equal.  I  do  not  mean  that  each  man  should  pay 
the  same  amount  of  tax;  but  it  should  be  equal  in  this:  it 
should  be  proportioned  to  the  ability  of  each  citizen4  to  con- 
tribute to  the  common  revenue,  and  by  being  thus  propor* 
tioned  it  will  meet  that  other  view  which,  has  been  taken  of 
taxation  by  some  writers,  it  will  be  in  proportion  to  the 
means  of  each  man,  which  are  protected  by  the  Government. 

With  a  view  to  considerations  which  will  be  presented 
later  in  this  discussion,  I  propose  now  to  take  a  summary 
notice  of  the  various  modes  of  taxation  which  might  be 
adopted  by  this  Government. 

The  first  form  is  direct  taxation,  which  is  a  tax  on  the 
corpus  of  property,  or  on  the  income  of  property,  or  a 
tax  on  the  head — a  capitation  tax,-  and  secondly,  indirect 
taxation. 

The  indirect  tax  is  a  tax  on  consumption;  because,  as  will 
be  shown  hereafter,  customs  duties,  license  taxes,  and  the 
excise  tax,  at  last  fall  on  the  consumer,  and  therefore  these 
indirect  forms  of  taxation  are  really  taxes  on  consumption. 

Let  us  look  at  them  for  a  moment/  Suppose  we  should 
raise  (as  the  gentleman  from  Rhode  Island  has  suggested) 
the  $300,000,000  of  revenue  we  need  by  a  capitation  tax  on 
50,000,000  of  people;  that  would  be  six  dollars  per  head, 
or  thirty  dollars  for  the  family  of  five  persons.  Now,  this 
tax  would  be  very  unequal  and  unjust,  and  specially  onerous 
on  the  poor ,  but  I  will  show  you  presently,  Mr.  Chairman, 
that  there  is  not  a  poor  laboring  man  in  the  country  who 
would  not  make  money  by  paying  such  a  capitation  tax 
instead  of  the  taxes  he  pays  under  this  tariff.  Thirty  dollars 
per  family  raised  by  a  capitation  tax  would  be  very  unequal, 
because  Vanderbilt  and  Gould  would  pay  no  more  tax  than 


THE   TARIFF — TUCKER.  433 

the  pauper  in  the  street.  They  would  pay  by  the  head  and 
not  according  to  ability. 

Now  take  a  tax  on  the  corpus  of  property.  That  ought  to 
be  ad  valorem;  because,  if  specific  then  the  same  tax  would 
be  laid  on  an  acre  of  mountain  land  as  upon  an  acre  in  the 
city  of  New  York.  Therefore,  it  must  be  ad  valorem  in 
order  to  approach  equality. 

But  if  ad  valorem,  it  would  be  an  unequal  tax,  because  it 
would  tax  the  scanty  furniture  of  the  wretched  room  of  the 
jVDor  seamstress  in  the  same  ratio  that  you  tax  the  owner  of 
a  palace  filled  with  luxuries  and  plenty. 

And  besides  you  would  tax  the  widow  with  her  two 
mites,  which  she  needs  for  her  living,  in  the  same  ratio 
that  you  tax  the  property  of  the  millionaire,  which  is  far  in 
excess  of  his  needs.  Besides,  you  would  make  the  non- 
income-bearing  property  pay  equally  with  that  which  breeds 
ample  income,  and,  furthermore,  you  would  relieve  the 
ample  income  of  the  professional  man  and  others  of  ail  tax 
because  they  have  no  tangible  property  you  could  reach. 

What  then  ?  It  is  best  and  fairest  to  lay  the  tax  accord- 
ing to  the  ability  of  the  tax-payers  to  pay,  because  all  taxes, 
you  perceive,  are  at  last  paid  out  of  the  man's  income.  The 
fairest  tax  of  all  the  various  forms  of  taxation,  in  my  judg- 
ment, that  can  be  laid  on  the  citizen  would  be  a  tax  pro- 
portioned to  incomes,  with  an  exemption  of  a  part  to  cover 
the  needs  of  life;  because  thus  you  would  make  the  man 
pay,  in  proportion  to  his  ability,  to  meet  the  exigencies  of 
the  Government.  And  while  thus  you  would  not  burden 
non-income  bearing  property,  you  would  make  those  con- 
tribute to  the  public  Treasury  who  get  an  income,  although 
they  have  no  ostensible  property.  Their  income  measures 
ability  to  pay  —  and  also  the  benefit  which  the  Government 
affords  to  him  who  earns  the  income  under  its  protecting 
care. 

I  come  now  to  indirect  taxation.  It  is  an  ingenious  device 
19 


434  THE   TARIFF — TUCKER. 

of  government  by  which  the  citizen  is  chloroformed  into 
unconsciousness  of  the  source  and  cause  of  the  felt  burden 
which  he  bears.  I  will  venture  to  say  there  is  hardly  one 
man  in  ten  in  the  secluded  parts  of  this  country  who 
realizes  the  fact  that  he  pays  in  some  States  as  much  as 
fourfold  more  of  tax  to  this  Government  than  he  does  to 
the  government  of  the  State  under  which  he  lives;  and 
therefore  it  is  that  there  is  a  temptation  —  and  I  beg  to  call 
gentlemen's  attention  to  it  —  on  the  part  of  the  people  to 
see  power  go  out  of  the  hands  of  the  States  into  the  hands 
of  this  Government,  because  power  which  requires  an  appro- 
priation  of  money  is  felt  by  the  people  of  the  country  less 
consciously  when  it  is  expended  by  this  Government  than 
when  it  is  expended  by  the  State  government. 

And,  in  my  judgment,  one  of  the  most  centralizing  tend- 
encies of  our  federative  system  results  from  this  fact:  that 
the  power  of  this  Government  is  made  effective  through 
indirect  taxation  of  which  the  citizen  is  unconscious,  while 
the  power  of  the  State  is  exercised  by  means  of  direct  taxa- 
tion; and  the  people,  so  unconscious  of  the  one  and  so  sen- 
sitively conscious  of  the  other,  are  reluctant  for  the  exercise 
of  power  by  the  States  which  will  require  the  taxation  they 
see  and  feel,  and  more  willingly  concede  that  power  to  the 
General  Government  because  it  is  to  be  exercised  through 
indirect  taxation  which  they  do  not  see  and  feel. 

But  the  payer  of  the  duty,  of  the  license  tax  and  of  the 
excise  knows  that  he  pays  no  tax  which  he  will  not  recover 
back  from  the  consumer;  and  the  consumer  forgets  or  fails 
to  remember  that  he  is  repaying  the  tax  or  duty  already  paid 
to  the  Government  by  these  middlemen,  the  amount  of  which 
tax  or  duty  is  included  and  concealed  in  the  price  of  the 
article  which  he  buys.  These  are,  therefore,  taxes  on  con- 
sumption, and  were  originally  invented  to  drug  the  people 
into  unconsciousness  and  thus  make  the  Government  irre- 
sponsible for  taxation  and  for  expenditure.  It  thus  stimu- 


THE   TARIFF — TUCKER.  435 

lates  extravagance  and  perpetuates  heavy  taxation;  for,  from 
the  effect  such  taxes  have  on  the  business,  industries,  and 
trade  of  the  country,  taxation  becomes  permanent,  for  fear 
a  change  may  disturb  these  sensitive  interests;  and  this  gen- 
eration is  to-day  paying  taxes  to  which  it  never  gave  its 
consent  through  its  representatives,  but  which  was  entailed 
upon  it  by  a  generation  now  dead  and  gone. 


CHAPTER  XXVI. 

FREE   TRADE.* 
BY  HON.  JOHN  G.  CARLISLE. 


MR.  PRESIDENT,  AND  GENTLEMEN  OF  THE  CLUB:  I 
would  be  cold  indeed  if  I  were  not  profoundly 
grateful  for  this  very  friendly  reception.  It  is  so  much 
more  than  I  expected  or  had  any  right  to  expect,  that  I  feel 
myself  wholly  unable  to  express  my  appreciation  of  it.  I 
am  obliged  to  you  also  for  the  opportunity  to  say  a  few 
words  in  response  to  the  toast  which  is  announced.  Al- 
though, of  course,  it  will  be  impossible  under  the  circum- 
stances to  do  justice  to  the  subject,  and  perhaps  I  shall  not 
confine  myself  very  closely  to  it.  Certainly  I  shall  not 
attempt  to  do  more  than  call  your  attention  to  one  or  two 
of  the  most  conspicuous  advantages  conferred  upon  the 
American  people  by  the  Union  established  in  1789. 

THE    FORMATION   OF   THE    UNION. 

The  formation  of  that  Union,  peaceable  and  voluntary, 
under  a  Constitution  which  made  such  radical  changes  in 
the  relations  previously  existing  between  the  several  States 
themselves  and  between  them  and  the  General  Government, 
was  undoubtedly  one  of  the  greatest  political  achievements 
of  modern  times.  It  is  difficult  to  say  which  is  the  more 
entitled  to  our  admiration,  the  statesmanship  of  the  men 


*  The  banquet  of  the  Free  Trade  Club  in  New  York,  March  15,  1884. 

(436) 


FREE   TRADE — CARLISLE.  437 

who  framed  the  Constitution,  or  the  patriotism  and  intelli- 
gence of  the  people  of  the  several  States  who  ratified  it  and 
made  it  for  themselves  and  posterity  the  supreme  law  of 
the  land.  It  is,  I  think,  safe  to  assert  that  in  no  other  part 
of  the  world  could  such  a  fundamental  change  have  been 
so  peaceably  made  at  that  time,  and  perhaps  it  is  equally 
safe  to  say  that  it  could  not  have  been  made  here  twenty  or 
thirty  years  later.  Why  and  how  this  Union  was  formed 
are  historical  questions  which  it  would  be  superfluous  and, 
in  fact,  impossible  to  discuss  upon  this  occasion.  What 
benefits,  what  advantages  it  has  yielded  or  conferred  upon 
us,  how  its  bonds  shall  be  strengthened  and  the  prosperity 
of  all  its  parts  increased  and  perpetuated,  are  questions 
which  challenge  our  attention  constantly. 


The  old  confederation  possessed  no  means  of  sustaining 
itself.  In  fact,  it  was  but  a  skeleton  of  a  government.  It 
had  no  power  to  impose  taxes  or  to  regulate  commerce  or 
to  administer  justice.  It  had  but  one  of  the  essential  de- 
partments of  a  real  government  —  the  Legislature  —  and 
even  that  was  defective  and  almost  impotent.  Each  State 
had  the  right  to  lay  imposts  and  duties  subject  only  to  the 
condition  that  they  should  not  interfere  with  treaties  en- 
tered into  by  the  United  States,  in  Congress  assembled, 
with  foreign  kings,  princes,  or  States.  There  was  no  limit- 
ation  whatever  upon  the  power  of  any -State  to  impose 
duties  upon  the  products  of  any  other  American  State 
brought  within  its  limits  for  sale  or  consumption.  For 
the  purpose  of  raising  a  revenue  or  for  the  purpose  of 
encouraging  its  own  domestic  manufactures  the  State  of 
New  York  had  full  power  to  impose  any  rate  of  duty  it 
might  see  fit  to  establish  upon  the  products  of  New  Jer- 
sey, and  the  State  of  New  Jersey  possessed  the  same  power 
in  respect  to  the  products  of  New  York.  If  the  doctrine 


488  FREE   TRADE — CARLISLE. 

of  protection  is  what  its  friends  claim,  if  its  application  to 
infant  industries  in  new  States  enables  them  to  overcome 
natural  disadvantages  and  to  secure  a  higher  degree  of  pros- 
perity than  would  otherwise'  be  attainable,  it  must  be  ad- 
mitted that  the  arrangement  existing  under  the  confed- 
eration was  a  wise  one  and  ought  never  to  have  been 
disturbed. 

THE    "  FATHERS  "    WERE    FREE    TRADERS. 

But,  gentlemen,  the  framers  of  the  Constitution,  the  men 
who  founded  this  federal  Union,  did  not  think  so.  They 
believed  that  free  trade  —  absolute  free  trade  between  the 
G?3veral  States  was  imperatively  demanded  by  the  interests 
of  the  people.  And  accordingly  they  adopted  this  provis- 
ion as  a  part  of  the  Constitution  without  a  single  dissenting 
vote: 

"No  State  shall,  without  the  consent  of  Congress,  lay  any 
Imposts  or  duties  upon  imports  or  exports  except  what  may 
be  absolutely  necessary  for  executing  its  inspection  laws,  and 
the  net  proceeds  of  all  duties  or  imposts  levied  by  any  State 
on  imports  or  exports  shall  be  for  the  use  of  the  Treasury  of 
the  United  States;  and  all  such  laws  shall  be  subject  to  the 
revision  and  control  of  Congress." 

It  is  true  that  Mr.  George  Clymer  of  Pennsylvania,  said 
in  the  Convention  while  this  subject  was  under  consideration 
that  "if  the  States  have  such  different  interests  that  they 
cannot  be  left  to  regulate  their  own  affairs  without  encoun- 
tering the  interest  of  other  States,  it  is  proof  that  they  are 
not  fit  to  compose  one  nation."  But  he  stood  substantially 
alone  in  his  opposition  to  this  provision,  arid  when  the  vote 
was  taken  not  a  single  State  was  recorded  against  it. 

CONSTITUTIONAL    ORIGIN    OF   FREE    TRADE. 

Thus  free  trade  was  established  by  the  Constitution,  not 
only  between  the  States  then  existing,  but  between  all  the 
States  that  might  thereafter  exist  as  members  of  the  fede- 


FREE   TRADE CARLISLE.  439 

ral  Union — and  I  venture  to  believe,  my  friends,  that 
the  most  ardent  advocate  of  the  protective  system  will 
admit  that  the  wonderful  growth  and  prosperity  of  this 
country  are  attributable  to  this  provision  more  largely 
than  to  any  other  one  thing.  With  free  commercial  in- 
tercourse between  the  States  our  own  internal  commerce 
has  steadily  and  rapidly  grown  until  it  amounts  to  thousands 
of  millions  of  dollars;  more  than  one  hundred  and  twenty 
thousand  miles  of  railroad  have  been  constructed,  over  which 
almost  innumerable  trains  are  constantly  passing,  carrying 
manufactured  and  other  articles  of  commerce  from  State  to 
State,  while  our  great  waterways  are  crowded  with  steamers 
and  barges  and  other  craft  laden  with  the  products  of  every 
part  of  the  Union.  The  markets  of  New  York  are  free  as 
the  markets  of  Philadelphia  to  the  iron  and  steel  and  coal  of 
Pennsylvania;  as  free  as  the  markets  of  Savannah  or  Mobile 
or  Charleston  for  the  cotton  and  the  fruits  of  the  South. 

THE    RIVAL    POLICIES    ILLUSTRATED. 

What  a  different  picture  this  country  presents  from  what 
it  would  have  presented  if  the  policy  of  restriction  and  pro- 
tection had  prevailed  among  the  States  as  it  has  prevailed 
for  so  many  years  between  the  United  States  and  foreign 
nations.  Under  the  liberal  policy  established  by  the 
Constitution  our  means  of  internal  communication  and 
transportation  have  increased  and  are  still  increasing,  while 
under  the  restrictive  and  obstructive  policy  of  Congress  our 
merchant  marine,  once  the  source  of  pride  and  profit,  has 
almost  disappeared  from  the  seas,  and  unless  something  can 
be  done  to  arrest  its  further  decline  it  will  disappear  entirely. 
Free  commercial  intercourse  between  the  States  has  increased 
trade,  promoted  the  development  of  our  resources,  fostered 
agriculture  and  manufactures,  and  added  untold  millions  to 
the  wealth  of  the  people;  while  the  protective  system  main- 
tained by  Congressional  legislation  has,  to  a  large  extent  at 


440  FREE   TRADE — CARLISLE. 

least,  shut  us  out  from  the  markets  of  the  outside  world, 
limited  production  substantially  to  the  demands  of  home 
consumption,  and  in  many  cases  actually  arrested  the  devel- 
opment of  great  industrial  interests.  Under  this  system, 
when  any  highly  protected  manufacturing  industry  has 
reached  a  stage  of  development  which  enables  it  to  supply 
the  home  demand  its  growth  must  virtually  cease  because  its 
products  can  have  access  to  no  other  market. 

ABUSE  OF  THE  POWER  OF  TAXATION. 

The  Constitution  not  only  prohibited  the  States  from  laying 
imposts  or  duties  upon  imports  or  exports,  but  it  expressly 
delegated  to  Congress  the  power  to  lay  and  collect  taxes, 
duties,  imports,  and  excises  to  pay  its  debts  and  provide  for 
the  common  defense  and  general  welfare.  This  is  simply 
the  power  to  raise  revenue  for  public  purposes.  It  is  wholly 
separate  and  distinct  from  the  power  to  regulate  commerce 
between  the  United  States  and  foreign  nations  and  among 
the  several  States  and  with  the  various  Indian  tribes,  which  is 
conferred  by  another  clause  of  the  Constitution.  The  two 
powers  were  delegated  for  entirely  different  purposes;  and 
it  is  a  monstrous  abuse  of  the  power  of  taxation  to  use  it, 
not  for  the  purpose  of  raising  revenue,  but  for  the  purpose 
of  regulating  or  prohibiting  commerce.  It  is,  if  possible,  a 
still  greater  abuse  of  that  power  to  employ  it  for  private  in- 
stead of  public  purposes. 

MR.  CARLISLE'S  PRECISE  ATTITUDE. 

Let  no  one,  I  pray  you,  misunderstand  me  upon  this  point. 
The  experience  of  mankind  has  shown  that  it  is  almost,  if 
not  quite,  impossible  to  devise  any  system  or  scheme  of  duties 
upon  imports  that  will  not  to  a  greater  or  less  degree  either 
injure  or  benefit  private  industrial  interests,  and  I  have  never 
hesitated  to  say  that  I  would  rather  benefit  them  than  injure 
them ;  but  what  I  mean  to  assert  is  that  when  the  primary  or 


FREE   TRADE — CARLISLE.  441 

principal  object  of  the  tax  imposed  by  public  authority  is  to 
foster  a  private  interest  it  is  not  a  legitimate  use  of  the 
power  of  taxation,  but  is  simply  spoliation.  Whether  what 
is  called  protection,  direct  or  incidental,  is  or  is  not  really 
beneficial  to  protect  industry  is  a  question  about  which  I  im- 
agine there  will  never  be  anything  like  perfect  unanimity  of 
opinion.  But  whatever  may  be  our  opinions  upon  that  ques- 
tion, most  of  us  will  agree,  I  think,  that  there  may  be  condi- 
tions under  which  it  might  not  be  wise  to  make  a  sudden 
change,  even  from  a  bad  policy  to  a  good  one. 

NEED    OF    CONSERVATIVE    ACTION. 

When  manufacturing  interests  have  grown  up  under  a 
high  protective  system,  and  in  a  series  of  years  have  adjusted 
themselves  to  it,  and  when  those  engaged  in  them  have  be- 
come accustomed  to  rely  upon  the  bounty  of  the  Govern- 
ment for  support,  it  might  be  injurious  and  even  disastrous 
to  them  to  suddenly  repeal  or  greatly  reduce  the  duties. 
Such  a  course  would  seriously  alarm  many  who  have  em- 
ployed their  capital  in  these  enterprises,  and  when  capital  is 
really  alarmed,  even  though  it  be  without  cause,  the  result, 
for  the  time  being  at  least,  is  the  same  as  if  there  were  really 
danger.  For  these  reasons,  if  there  were  no  others,  it  has 
always  been  my  opinion  that  it  is  the  duty  of  Congress  to 
proceed  carefully  and  conservatively  in  its  legislation  on  this 
subject — having  due  .regard  at  every  step  to  the  large  inter- 
ests involved.  In  other  words,  I  am  in  favor  of  a  reforma- 
tion, not  a  revolution.  But,  Mr.  President,  this  process  of 
reformation  must  go  on  until  the  power  of  taxation  is  used 
only  for  proper  purposes.  There  must  be  no  step  backward 
— nor  any  deviation  from  correct  principle  and  sound  policy. 
As  I  have  already  briefly  intimated,  this  federal  union  is  a 
commercial  as  well  as  a  political  one.  Politically  we  are 
free;  commercially  we  are  not. 
19* 


442  FREE   TRADE — CARLISLE. 

A    STRANGE    PERVERSION    OF    PRINCIPLES. 

When  our  ancestors  determined  to  rebel  against  the  Brit- 
ish system  of  government -in  America  one  of  the  principal 
causes  alleged  in  the  Declaration  of  Independence  was  that 
it  had  cut  off  their  trade  with  all  parts  of  the  world.  Is  it 
not  strange,  my  friends,  that  the  Government  established 
over  this  people  by  the  same  men  will  persist  in  the  main- 
tenance of  a  policy  which  must  ultimately  produce  sub- 
stantially the  same  result — namely,  the  cutting  off  of  our 
trade  with  all  parts  of  the  world?  Let  us  see  to  it  the 
foundation  for  such  an  accusation  against  the  Government 
of  the  Union  is  removed  as  speedily  as  circumstances  will 
admit.  Taxation  only  for  the  purpose  of  raising  revenue 
for  the  public  use;  commercial  regulation  in  time  of  peace, 
only  for  purposes  of  protecting  and  fostering  legitimate 
trade,  will  strengthen  the  Union,  insure  the  prosperity  of 
the  people,  and  perpetuate  the  system  of  Government  under 
which  we  live. 

For  myself,  Mr.  Chairman,  I  will  cheerfully  cooperate 
with  all  men  and  all  organizations,  by  whatever  name  they 
may  be  known,  in  all  proper  efforts  to  bring  about  this  grand 
result. 


CHAPTER    XXVII. 

FREE   TRADE   FOR   SHIPPING. 
BY  HON.  JAMES  G.   ELAINE,  LL.D. 


"YT~T~HEN  you  build  a  ship  for  the  commerce  of  the 
VV  world,  you  send  it  abroad  to  compete  with  every 
other  ship  in  every  other  country.  You  are  unable  by  your 
laws  to  give  her  any  protection  or  to  prevent  the  greatest 
competition  from  every  other  nation  in  the  world.  When 
fou  protect  your  manufactures  at  home  by  laying  on  a  duty 
upon  the  same  manufacture  of  other  countries,  why,  sir,  you 
ahut  out  the  entire  competition  of  the  world.  If  you  levy 
an  internal  revenue  tax  upon  our  manufactures  here,  you  at 
the  same  time  raise  the  tariff  duty  in  order  that  the  internal 
tax  may  not  depress  the  home  manufacture  or  give  an  ad- 
vantage to  the  foreign  article.  You  raise  the  tariff  in  order 

that  you  may  shut  out  foreign  competition 

I  say  further,  Mr.  Speaker,  that  I  object  entirely  to  this 
being  considered  a  bounty  to  the  ship-builder.  I  object 
utterly  to  it.  I  deny  it.  I  deny  that  it  is  a  bounty.  I  say 
that  all  the  ship-builders  ask  is  to  be  relieved  from  these 
burdens.  There  is  a  wide  distinction  in  the  logic  and  state- 
ment of  the  case.  You  find  no  protection  to  these  ships.  If 
I  build  a  ship  on  the  banks  of  the  Kennebec,  send  her  to 
Liverpool,  and  she  meets  a  ship  from  the  banks  of  the  St. 
John,  or  from  any  other  part  of  the  world,  now  what  pro- 

(443) 


444  FREE   TRADE   FOR    SHIPPING. 


tection  do  your  laws  give  her  over  the  foreign  ships?  What 
protection  do  you  give  her?  Not  the  slightest  in  the  world. 

There  is  one  fact  further  which  gentlemen  ignore  entirely, 
and  that  is  the  freights  of  these  ships  are  in  many  instances 
more  valuable  than  the  cargoes  they  carry,  the  immense 
trade  carried  in  American  bottoms  from  the  Chinch  a  Is- 
lands, the  guano  trade,  there  the  freights  were  uniformily 
worth  more  than  the  cargo  itself.  To-day  the  vast  amount 
of  freights  for  the  transportation  of  British  coal  amounts  to 
more  than  the  cargo.  It  is  on  freights  that  Great  Britain  is 
growing  rich  and  drawing  to  herself  the  riches  of  the 
world.  Yet  we  stand  here  haggling  over  the  remission  of  a 
little  bit  of  duty  which  is  insignificant  compared  with  the 
millions  of  freights  we  might  have  in  our  grasp  if  we  gave 
any  fair  encouragement  to  our  commerce. 

June  17,  1868. 

FREE    BREAD    AND    FREE    LUMBER. 

In  the  first  place,  let  me  say  that  during  the  entire  war, 
when  we  were  seeking  everything  on  the  earth,  and  in  the 
skies,  and  in  the  waters  under  the  earth,  out  of  which  taxa- 
tion could  be  wrung,  it  never  entered  into  the  conception  of 
Congress  to  tax  breadstuffs — never.  During  the  most  press- 
ing exigencies  of  the  terrible  contest  in  which  we  were 
engaged,  neither  bread  stuffs  nor  lumber  ever  became  the 
subject  of  one  penny  of  taxation.  It  was  not  because  of 
the  influence  of  the  rich  grain  dealers  at  Chicago,  or  Toledo, 
or  Milwaukee.  It  was  because  if  anything  be  universal, 
breadstuffs  are  universal;  for  they  constitute  literally  u  the 
staff  of  life."  If  you  impose  on  them  a  tax  ever  so  small 
in  amount  it  will  be  made  a  pretext  by  the  very  speculators 
of  whom  gentlemen  talk  for  adding  an  appreciable  amount 

to  the  cost  of  a  barrel  of  flour Now  as  to  the  article 

of  lumber,  I  again  remind  the  House  that  there  never  has 


FREE  TRADE  FOR  SHIPPING.  445 

been  a  tax  upon  this  article.  The  gentleman  from  Ohio 
may  talk  of  this  question  as  he  pleases;  but  I  say  that 
wherever  the  western  frontiersman  undertakes  to  make  for 
himself  a  home,  to  till  the  soil,  to  carry  on  the  business  of 
life,  he  needs  lumber  for  his  cabin;'  he  needs  lumber  for  his 
fence;  he  needs  lumber  for  his  wagon  or  cart;  he  needs 
lumber  for  his  plow;  he  needs  lumber  for  almost  every  pur. 
pose  in  his  daily  life.  June  10,  1868, 

MR.  ELAINE  INTERVIEWED. 

PARIS,  December  7, 1887. 

I  am  in  favor  of  the  repeal  of  the  tax  on  tobacco.  "I  should  urge  that  it  be 
done  at  once,  even  before  the  Christmas  holidays.  It  would,  in  the  first  place, 
bring  great  relief  to  growers  of  tobacco  all  over  the  country,  and  would,  moreover, 
materially  lessen  the  price  of  the  article  to  consumers.  Tobacco  to  millions  of 
men  is  a  necessity.  The  President  calls  it  a  luxury,  but  it  is  a  luxury  in  no  other 
sense  than  tea  and  coffee  are  luxuries.  Watch,  if  you  please,  the  number  of  men 
at  work  on  the  farm,  in  the  coal  mine,  along  the  railroad,  in  the  iron  foundry,  or 
in  any  calling,  and  you  will  find  ninety-five  in  one  hundred  chewing  while  they 
work.  After  each  meal,  the  same  proportion  seek  the  solace  of  a  pipe  or  a  cigar. 
These  men  not  only  pay  the  millions  of  the  tobacco  tax,  but  pay  on  every  plug 
and  every  cigar  an  enhanced  price  which  the  tax  enables  the  manufacturer  and 
retailer  to  impose.  The  only  excuse  for  such  a  tax  is  the  actual  necessity  under 
which  the  government  found  itself  during  the  war  and  the  years  immediately  fol- 
lowing. To  retain  the  tax  now,  in  order  to  destroy  the  protection  which  would 
incidentally  follow  raising  the  same  amount  of  money  on  foreign  imports,  is  cer- 
tainly a  most  extraordinary  policy  for  our  government.1" 

"Well,  then,  Mr.  Blaine,  would  you  advise  the  repeal  of  the  whisky  tax  also  ?  " 

"No,  I  would  not.  Other  considerations  than  those  of  financial  administration 
are  to  be  taken  into  account  in  regard  to  whisky.  There  is  a  moral  side  to  it.  To 
cheapen  the  price  of  whisky  is  to  increase  the  consumption  enormously.  There 
would  be  no  sense  in  urging  the  reform  wrought  by  high  license  in  many  States, 
if  the  national  government  neutralizes  the  good  effect  by  making  whisky  within 
reach  of  every  one  at  twenty  cents  a  gallon.  Whisky  would  be  everywhere  dis- 
tilled if  the  surveillance  of  the  government  were  withdrawn  by  the  remission  of 
the  tax,  and  illicit  sales  could  not  then  be  prevented  even  by  a  policy  as  rigorous 
and  searching  as  that  with  which  Russia  pursues  the  Nihilists.  It  would  destroy 
high  license  at  once  in  all  the  States.  Whisky  has  done  a  vast  deal  of  harm  in 
the  United  States.  I  would  try  to  make  it  do  some  good.  I  would  use  the  tax  to 
fortify  our  cities  on  the  seaboard.  In  view  of  the  powerful  letter  addressed  to 
the  Democratic  party  on  the  subject  of  fortification  by  the  late  Mr.  Samuel  J. 
Tilden  in  1885,  I  am  amazed  that  no  attention  has  been  paid  to  the  subject  by  the 
Democratic  Administration.  Never  before  in  the  history  of  the  world  hui#  any 
government  allowed  great  cities  on  the  seaboard  like  Philadelphia,  New  York, 
Boston,  Baltimore,  New  Orleans,  and  San  Francisco  to  remain  defenceless/1 

"But  after  the  fortifications  should  be  constructed,  \\ouid  yon  sfill  maintain  the 
tax  on  whisky  ?  " 

"Yes,"  said  Mr.  Blaine,  "so  long  as  there  is  whisky  to  tax  I  would  tax  it,  and 
when  the  national  government  should  have  no  use  for  the  money  I  would  divide 
the  tax  among  the  federal  union  with  the  specific  object  of  lightening  the  tax  on 
real  estate." 


CHAPTEK   XXVIII. 

"SOMETHING   ELSE."* 

BY  M.   FEEDEEIG  BASTIAT. 
Member  of  the  Institute  of  France. 


HTYT~HAT  is  restriction?  A  partial  prohibition.  What 
VV  is  prohibition?  An  absolute  restriction.  So  that 
what  is  said  of  one  is  true  of  the  other?  Yes,  compara- 
tively. They  bear  the  same  relation  to  each  other  that  the 
arc  of  the  circle  does  to  the  circle.  Then  if  prohibition  is 
bad,  restriction  cannot  be  good  ?  No  more  than  the  arc  can 
be  straight  if  the  circle  is  curved. 

What  is  the  common  name  for  restriction  and  prohibition? 
Protection.  Yfhat  is  the  definite  effect  of  protection?  To 
require  from  men  harder  labor  for  the  same  result.  "Why  are 
men  so  attached  to  the  protective  system?  Because,  since 
liberty  would  accomplish  the  same  result  with  less  labor,  this 
apparent  diminution  of  labor  frightens  them.  Why  do  you 
say  appareii  t  ?  Because  all  labor  economized  can  be  devoted 
to  something  else.  What?  That  cannot  and  need  not  be 
determined.  Why?  Because,  if  the  total  of  the  comforts 
of  France  could  be  gained  with  a  diminution  of  one-tenth 
on  the  total  of  its  labor,  no  one  could  determine  what  com- 
forts it  would  procure  with  the  labor  remaining  at  its  dispo- 
sal. One  person  would  prefer  to  be  better  clothed,  another 
better  fed,  another  better  taught,  and  another  more  amused. 

Explain  the  workings  and  effect  of  protection.  It  is  not 
an  easy  matter.  Before  taking  hold  of  a  complicated  in- 

*  Sophisms  of  Protection;  G.  P.  Putnam's  Sons,  N.  Y. 

(446^ 


"SOMETHING    ELSE."  447 

stance,  it  must  be  studied  in  the  simplest  one.  Take  the 
simplest  you  choose.  Do  you  recollect  how  Robinson  Cru- 
soe, having  no  saw,  set  to  work  to  make  a  plank?  Yes.  He 
cut  down  a  tree,  and  then  with  his  axe  hewed  the  trunk  on 
both  sides  until  he  got  it  down  to  the  thickness  of  a  board. 
And  that  gave  him  an  abundance  of  work  ?  Fifteen  full 
days.  What  did  he  live  on  during  this  time  ?  His  provis- 
ions. What  happened  to  the  axe?  It  was  all  blunted. 
Very  good;  but  there  is  one  thing  which,  perhaps,  you  do 
not  know.  At  the  moment  that  Robinson  gave  the  first 
blow  with  his  axe,  he  saw  a  plank  which  the  waves  had  cast 
up  on  the  shore.  Oh,  the  lucky  accident!  He  ran  to  pick 
it  up?  It  was  his  first  impluse;  but  he  checked  himself, 
reasoning  thus:  "If  I  go  after  this  plank,  it  will  cost  me 
but  the  labor  of  carrying  it  and  the  time  spent  in  going  to 
and  returning  from  the  shore.  But  if  I  make  a  plank  with 
my  axe,  I  shall  in  the  first  place  obtain  work  for  fifteen 
days,  then  I  shall  wear  'out  my  axe,  which  will  give  me  an 
opportunity  of  repairing  it,  and  I  shall  consume  my  provis- 
ions, which  will  be  a  third  source  of  labor,  since  they  must 
be  replaced.  Now,  labor  is  wealth.  It  is  plain  that  I  will 
ruin  myself  if  I  pick  up  this  stranded  board.  It  is  import- 
ant to  protect  my  personal  labor,  and  now  that  I  think  of  it, 
I  can  create  myself  additional  labor  by  kicking  this  board 
back  into  the  sea." 

But  this  reasoning  was  absurd !  Certainly.  Nevertheless 
it  is  that  adopted  by  every  nation  which  protects  itself  by 
prohibition.  It  rejects  the  plank  which  is  offered  it  in 
exchange  for  a  little  labor,  in  order  to  give  itself  more  labor. 
It  sees  a  gain  even  in  the  labor  of  the  custom-house  officer. 
This  answers  to  the  trouble  which  Robinson  took  to  give 
back  to  the  waves  the  present  they  wished  to  make  him. 
Consider  the  nation  a  collective  being,  and  you  will  not  find 
an  atom  of  difference  between  its  reasoning  and  that  of  Rob- 
inson. Did  not  Robinson  see  that  he  could  use  the  time 
saved  in  doing  something  else  ?  What  "  something  else  "  ? 


448  "SOMETHING    ELSE.' 


So  long  as  one  lias  wants  and  time,  one  has  always  some- 
thing to  do.  I  am  not  bound  to  specify  the  labor  that  he 
could  undertake.  I  can  specify  very  easily  that  which  he 
would  have  avoided.  I  assert  that  Robinson,  with  incredi- 
ble blindness,  confounded  labor  with  its  result,  the  end  with 
the  means,  and  I  will  prove  it  to  you.  It  is  not  necessary. 
But  this  is  the  restrictive  or  prohibitory  system  in  its  simplest 
form.  If  it  appears  absurd  to  you,  thus  stated,  it  is  because 
the  two  qualities  of  producer  and  consumer  are  here  united 
in  the  same  person. 

Let  us  pass,  then,  to  a  more  complicated  instance.  Will- 
ingly. Some  time  after  all  this,  Robinson  having  met  Friday, 
they  united  and  began  to  work  in  common.  They  hunted 
for  six  hours  each  morning  and  brought  home  four  hampers 
of  game.  They  worked  in  the  garden  for  six  hours  each 
afternoon,  and  obtained  four  baskets  of  vegetables.  One 
day  a  canoe  touched  at  the  Island  of  Despair.  A  good-looking 
stranger  landed  and  was  allowed  to  dine  with  our  two 
hermits.  He  tasted,  and  praised  the  products  of  the  garden, 
and  before  taking  leave  of  his  hosts,  said  to  them:  "Gener- 
ous Islanders,  I  dwell  in  a  country  much  richer  in  game 
than  this,  but  where  horticulture  is  unknown.  It  would  be 
easy  for  me  to  bring  you  every  evening  four  hampers  of 
game  if  you  would  give  me  only  two  baskets  of  vegetables." 

At  these  words  Robinson  and  Friday  stepped  on  one  side 
to  have  a  consultation,  and  the  debate  which  followed  is  too 
interesting  not  to  be  given  in  extenso :  Friday — Friend,  what 
do  you  think  of  it  ?  Robinson — If  we  accept,  we  are 
ruined.  Friday  — Is  that  certain  ?  Calculate  !  Robinson — 
It  is  all  calculated.  Hunting,  crushed  out  by  competition, 
will  be  a  lost  branch  of  industry  for  us.  Friday  — What  dif- 
ference does  that  make  if  we  have  the  game  ?  Robinson  — 
Theory !  It  will  not  be  the  product  of  our  labor.  Friday  — 
Yes  it  will,  since  we  will  have  to  give  vegetables  to  get  it. 
Rolinson  —  Then  what  shall  we  make?  Friday  —  The  four 


"SOMETHING    ELSE."  449 

hampers  of  game  cost  us  six  hours'  labor.  The  stranger 
gives  them  to  us  for  two  baskets  of  vegetables,  which  take 
us  but  three  hours.  Thus  three  hours  remain  at  our  disposal. 
Robinson — Say  rather  that  they  are  taken  from  our  activity 
There  is  our  loss.  Labor  is  wealth,  and  if  we  lose  a  fourth 
of  our  time  we  are  one-fourth  poorer.  Friday — Friend,  you 
make  an  enormous  mistake.  The  same  amount  of  game  and 
vegetables  and  three  free  hours  to  boot  make  progress,  or 
'there  is  none  in  the  world.  Robinson — Mere  generalities. 
What  will  we  do  with  these  three  hours?  Friday — "We 
will  do  something  else.  Robinson — Ah,  now  I  have  you.  You 
can  specify  nothing.  It  is  very  easy  to  say  something  else — 
something  else.  Friday  — We  will  fish.  We  will  adorn  our 
houses.  We  will  read  the  Bible.  Robinson — Utopia!  Is 
it  certain  that  we  will  do  this  rather  than  that  ?  Friday  — 
Well,  if  we  have  no  wants,  we  will  rest.  Is  rest  nothing? 
Robinson  — When  one  rests  one  dies  of  hunger. 

Friday  — Friend,  you  are  in  a  vicious  circle.  I  speak  of  a 
rest  which  diminishes  neither  our  gains  nor  our  vegetables. 
You  always  forget  that  by  means  of  our  commerce  with  this 
stranger  nine  hours  of  labor  will  give  us  as  much  food  as 
twelve  now  do.  Robinson  — It  is  easy  to  see  that  you  were 
not  reared  in  Europe.  Perhaps  you  have  never  read  the 
Moniteur  Industriel?  It  would  have  taught  you  this:  "All 
time  saved  is  a  dear  loss.  Eating  is  not  the  important  mat- 
ter, but  working.  Nothing  which  we  consume  counts  if  it 
is  not  the  product  of  our  labor.  Do  you  wish  to  know 
whether  you  are  rich  ?  Do  not  look  at  your  comforts,  but 
at  your  trouble."  This  is  what  the  Moniteur  Industriel  would 
have  taught  you.  I,  who  am  not  a  theorist,  see  but  the  loss 
of  our  hunting. 

Friday  —  What  a  strange  perversion  of  ideas.  But — 
Robinson  — No  buts.  Besides,  there  are  political  reasons  for 
rejecting  the  interested  offers  of  this  perfidious  stranger. 
Friday — Political  reasons  !  Robinson — Yes.  In  the  first  place, 


450  "  SOMETHING    ELSE.' 


he  makes  these  offers  only  because  they  are  for  his  advantage. 
Friday — So  much  the  better,  since  they  are  for  ours  also. 
Robinson  —  Then  by  these  exchanges  we  shall  become 
dependent  on  him.  Friday  — And  he  on  us.  "We  need  his 
game,  he  our  vegetables,  and  we  will  live  in  good  friendship. 
Robinson — Fancy !  Do  you  want  I  should  leave  you  without 
an  answer  ?  Friday  — Let  us  see;  I  am  still  waiting  a  good 
reason.  Robinson  — Supposing  that  the  stranger  learns  to 
cultivate  a  garden,  and  that  his  island  is  more  fertile  than  ours. 
Do  you  see  the  consequences  ?  Friday  — Yes.  Our  relations 
with  the  stranger  will  stop.  He  will  take  no  more  vegeta- 
bles from  us,  since  he  can  get  them  at  home  with  less  trouble. 
He  will  bring  us  no  more  game,  since  we  will  have  nothing 
to  give  in  exchange,  and  we  will  be  then  just  where  you 
want  us  to  be  now.  Robinson — Short-sighted  savage!  You 
do  not  see  that  after  having  destroyed  our  hunting  by  inun- 
dating us  with  game,  he  will  kill  our  gardening  by  over- 
whelming us  with  vegetables.  Friday  — But  he  will  do  that 
only  so  long  as  we  give  him  something  else  ;  that  is  to  say,  so 
long  as  we  find  something  else  to  produce,  which  will  econo- 
mize our  labor.  Robinson  — Something  else — something  else  ! 
You  always  come  back  to  that.  You  are  very  vague,  friend 
Friday,  there  is  nothing  practical  in  your  views. 

The  contest  lasted  a  long  time,  and,  as  often  happens,  left 
each  one  convinced  that  he  was  right.  However,  Robinson 
having  great  influence  over  Friday,  his  views  prevailed,  and 
when  the  stranger  came  for  an  answer.  Robinson  said  to  him: 
"  Stranger,  in  order  that  your  proposition  may  be  accepted, 
we  must  be  quite  sure  of  two  things:  The  first  is  that 
your  island  is  not  richer  in  game  than  OU«-T  for  we  will 
struggle  but  with  equal  arms.  The  second  $  it  you  will 
lose  by  the  bargain.  For,  as  in  every  exchange  there  is 
necessarily  a  gainer  and  a  loser,  we  would  be  cheated  if  you 
were  not.  What  have  you  to  say  ?  "  '  Nothing,  nothing," 
replied  the  stranger,  who  burst  out  laughing,  and  returned 
to  his  canoe. 


CHAPTER  XXIX. 

FREE  TRADE. 
BY  PROF.  EMILE  DE  LAVELEYE.* 


A  MERCHANT  on  being  asked  by  the  French  states- 
man, Colbert,  what  was  the  best  way  of  favoring 
commerce,  made  answer:  "  Leave  it  alone;"  and  this  reply 
of  his  has  become  the  watchword  of  the  supporters  of  free- 
dom of  trade,  or,  as  it  is  sometimes  called,  free  exchange. 
What,  in  fact,  can  be  more  natural  than  to  allow  every  one 
to  buy  and  sell  where  he  can  do  so  most  advantageously, 
whether  in  or  out  of  his  own  country  ? 

To  raise  a  revenue,  a  State  is  still  justified  in  imposing 
custom  dues  on  the  importation  of  certain  foreign  goods, 
though  the  tax  is  a  bad  one;  but  to  establish  these  duties 
under  the  pretext  of  protecting  national  industries  is  an 
iniquitous  measure,  fatal  to  the  general  interest.  By  forcing 
consumers  to  buy  from  the  protected  manufacturers  at 
higher  prices  than  they  would  elsewhere  have  to  pay,  the 
gross  injustice  is  committed  of  taxing  one  class  for  the 
benefit  of  another.  It  is  in  this  that  the  system  of  protection 
consists.  If  it  be  said  that  the  object  is  to  favor  labor,  and 
consequently  laborers,  a  double  error  is  committed. 

Error  the  Fir**  -The  aim  of  economics  is  not  to  increase 
but  to  dimini,  .jor.  If  I  can  obtain  a  yard  of  cloth  from 
a  foreigner  l>y  Cleans  of  one  day's  work,  it  is  contrary  to  this 
aim  to  force  me  to  spend  two.  The  eagerness  to  increase 

*Elements  of  PriWca?  Economy.    New  York,  G.  P.  Putnam's  Sons,  1884. 

(451) 


452  FREE   TRADE — LAVELEYE. 

labor  without  augmenting  production  has  been  well  called 
fi  Sisyphism, "  for  it  chains  humanity  to  efforts  that  lead  to 
no  result,  just  as  Sisyphus  was  compelled  to  roll  to  the 
summit  of  a  hill  a  stone  that  always  fell  back  again.  The 
goal  we  should  pursue  is  the  increase  of  commodities  and 
diminution  of  toil. 

Error  the  Second. — No  service,  but  an  injury,  is  done  to 
workmen  in  thrusting  them  into  manufactories  by  force  of 
law  and  in  spite  of  nature.  Thus  in  the  case  of  Italy  it  is  a 
thousand  pities  that  the  custom  house  should  have  snatched 
workmen  and  workwomen  from  their  open  air  tasks  in  this 
lovely  country  with  its  genial  climate,  to  chain  them  in 
gloomy  work-shops  for  twelve  or  fourteen  hours  a  day  to  the 
monotonous  movements  of  machines. 

Free  trade  by  applying  to  whole  peoples  the  principle  of 
the  division  of  labor,  assures  them  all  the  benefits  it  can 
bestow,  and  thus  greatly  increases  their  welfare.  If  in  a 
family  each  member  is  employed  at  what  he  can  do  best,  it 
is  clear  that  the  total  product,  and  consequently  the  indi- 
vidual shares,  will  be  as  great  as  can  be  attained.  On  the 
•  contrary,  if  each  is  forced  by  legislative  restrictions  to 
devote  a  part  of  his  time  to  a  labor  for  which  he  has  no 
aptitude,  each  and  all  will  be  worse  off.  Apply  this  princi- 
ple to  nations,  and  it  is  plain  that  when  each  country  devotes 
its  energies  to  the  tasks  which  its  nature  most  favors,  not 
only  will  it  bring  to  the  international  market  the  maximum 
of  products  obtained  with  the  minimum  of  toil,  but  the 
welfare  of  humanity  at  large  will  be  increased  in  proportion 
to  the  increase  of  the  productivity  of  each  country's  labor. 

A  man  who,  in  the  wish  to  be  self -sufficing,  should 
constrain  himself  to  manufacture  everything  he  needed, 
food,  clothing,  furniture,  and  books,  would  plainly  be  ex- 
tremely foolish,  nor  is  a  nation  that  imitates  him  any  wiser. 

If  the  soil  of  my  farm  is  sandy,  and  so  better  suited  for 
rye  than  for  wheat,  the  least  laborious  way  of  obtaining 


FREE   TRADE — LAVELEYE.  453 

wheat  is,  not  to  cultivate  it  myself,  but  to  ask  for  it  in 
exchange  for  my  rye  of  those  who  have  a  clay  soil.  This 
plain  truth  demonstrates  the  absurdity  of  the  system  of 
protection  which  would  oblige  me  to  grow  wheat  even  upon 
sand. 

The  upholders  of  protection  make  the  further  objection 
that  foreigners  will  inundate  us  with  their  produce.  Such 
a  fear  is  quite  idle,  since  foreigners  will  not  give  us  their 
goods  for  nothing,  but  will  be  willing  to  take  ours  in  pay- 
ment. Commerce  is  always  an  exchange  of  produce  against 
produce.  So  much  imported,  so  much  exported.  If  imports 
exceed  exports,  all  the  better;  the  foreigner  is  paying  us  a 
tribute,  and  we  shall  have  more  to  consume.  If  exports 
axceed  imports,  all  the  worse,  it  is  now  we  who  are  paying 
A  tribute.  Here,  however,  we  are  touching  on  the  difficult 
question  of  the  balance  of  commerce,  the  discussion  of 
which  we  defer  to  a  later  paragraph. 

Protectionists  are  anxious  to  sell  much  and  buy  little,  in 
order  that  the  foreigner  may  be  forced  to  pay  the  excess  of 
his  purchases  in  cash.  These  aims  involve  a  great  contra- 
diction. It  is  clearly  impossible  for  the  different  countries 
in  their  exchanges  with  one  another  always  to  sell  more  than 
they  buy. 

The  principal  cause  of  industrial  progress  in  a  country, 
is,  as  we  have  seen,  the  competition  between  manufacturers, 
each  of  whom  strives  to  improve,  and,  above  all,  to  cheapen, 
his  fabrics,  in  order  to  extend  his  business.  The  more 
widely  competition  is  extended,  the  greater  will  be  every, 
one's  profit.  Do  not,  therefore,  limit  it  by  the  frontiers  of 
a  state,  but  extend  it  from  country  to  country.  Monopoly 
begets  sloth,  and  protection,  routine.  On  the  other  hand, 
the  manufacturer  who  is  forced  to  carry  everything  to  per- 
fection  in  endeavoring  to  keep  his  hold  of  the  home  market 
will  conquer  that  of  the  world. 

A  railroad  uniting  two  countries  facilitates   exchanges. 


454  FREE    TRADE LAVELEYE. 


Custom  dues  on  foreign  goods  impede  them.  Yet  the  same 
men  at  the  same  time  support  two  policies,  the  results  of 
which  are  thus  completely  diverse.  That  Frenchmen  and 
Italians,  after  spending  nearly  two  millions  sterling  in  boring 
a  tunnel  through  the  Alps,  can  place  their  custom-house 
officers  at  each  end  to  destroy  in  a  great  measure  by  the 
dues  they  exact  the  usefulness  of  this  marvel  of  engineering, 
is  an  inexplicable  contradiction. 

To  be  consistent,  a  protectionist  should  demand  the 
destruction  of  machines,  for  machines  and  free  trade  have 
as  their  common  result  the  diminution  of  the  labor  neces- 
sary to  obtain  an  object.  Thanks  to  machinery  I  obtain  my 
coal  at  less  expense  ;  thanks  to  the  stranger  I  again  obtain 
it  cheaper;  the  result  is  identically  the  same.  If  we  exclude 
the  foreigner  we  should  also  break  our  machines;  and  thus 
increase  in  both  ways  the  amount  of  labor  requisite  to  obtain 
a  given  quantity  of  coal. 

Capital  turns  spontaneously  to  the  most  lucrative  field  of 
employment.  Protection  diverts  it  from  these  to  the  less 
lucrative,  compensating  it  for  the  difference  by  a  tax  levied 
on  consumers,  by  the  amount  of  which  tax  production  is 
again  diminished. 

/  As  their  last  argument  protectionists  maintain  that  for 
objects  of  the  first  necessity,  such  as  corn  and  iron,  a 
country  should  be  independent  of  foreigners,  lest,  in  case 
of  war,  it  should  find  itself  without  the  means  of  nourish, 
ment  or  defense.  There  is  no  example,  however,  of  a 
people  having  lacked  necessaries  in  war  time,  and  to-day 
there  is  even  less  cause  for  fear  than  formerly.  In  the  first 
place  railways  facilitate  re  victualling ;  in  the,  second,  since 
the  Treaty  of  Paris,  in  1856,  the  ships  of  neutrals 'may 
continue  to  transport  the  goods  of  belligerents.  The  com- 
plete blockade  of  a  state  is  thus  more  impossible  than  ever; 
and  it  is  the  height  of  folly  to  inflict  a  permanent  and 
certain  harm  in  order  to  avoid  a  distant  and  more  than 
improbable  one. 


CHAPTER  XXX. 

TARIFF  AND  WAGES.* 

BY  F.  W.  TAUSSIG, 
Instructor  in  Political  Economy  in  Harvard  College. 


general  question  of  free  trade  and  protection  has 
_L_  been  treated  in  a  previous  chapter  (Book  III,  Chapter 
VI).  One  argument  for  protection  was  not  mentioned  there, 
which  is  much  urged  by  protectionists  in  the  United  States 
— the  argument  that  protection  is  necessary  to  maintain  the 
high  wages  paid  in  this  country.  It  is  said  by  the  advocates 
of  protection  that  the  competition  of  articles  made  by  ill-paid 
laborers  in  Europe  would  reduce,  if  free  trade  were  estab- 
lished, the  prices  of  articles  made  in  this  country,  and  that 
wages  must  fall  correspondingly.  Professor  Laveleye  does 
not  mention  this  argument,  because  it  is  not  advanced  by 
protectionists  in  Europe.  On  the  contrary,  in  Germany  and 
France  high  duties  are  demanded  in  order  to  protect  the 
ill-paid  laborers  of  those  countries  from  the  competition 
of  the  better-paid  laborers  of  England.  This  fact  shows 
sufficiently  that  low  wages  in  themselves  do  not  enable  a 
country  to  compete  in  another  country,  and  that  high  wages 
do  not  prevent  it  from  competing;  otherwise  England  could 
not  compete  ion  the  continent  of  Europe.  The  truth  of  the 
matter  in  thjs  country  is,  that  in  those  branches  of  industry 
to  which  we  can  most  advantageously  direct  our  labor  and 
capital,  the  laborers  produce  a  large  product,  and  employers 

*  Supplementary  Chapter  in  Laveleye 's  Political  Economy. 

(455) 


456  TARIFF    AND    WAGES — TAUSSIG. 

can  afford  to  pay  them  high  wages.  If  in  a  given  branch 
of  industry,  these  high  wages  cannot  be  afforded,  this  indus- 
try is  one  which  it  is  not  advantageous  for  our  country  to 
undertake.  Agricultural  laborers  in  the  United  States  are 
paid  much  higher  wages  than  such  laborers  receive  in  any 
European  country.  Yet  nobody  believes  that  the  wheat  and 
grain  produced  by  the  ill-paid  laborers  of  Europe  can  be 
imported  hither  in  competition  with  our  own  wheat  and 
grain;  everybody  knows  that,  on  the  contrary,  we  export 
these  products  to  Europe.  The  reason  is  that  the  United 
States  have  great  advantages  for  raising  agricultural  prod- 
ucts; hence  high  wages  are  and  can  be  paid  to  the  laborers 
producing  them.  The  general  high  rate  of  wages  with  us 
is  due  fundamentally  to  the  great  general  productiveness  of 
labor,  which,  again,  is  due  in  part  to  the  energy  and  effi- 
ciency of  our  laborers,  in  part  to  the  extended  use  of 
machinery,  and  in  a  very  large  part  to  our  great  natural 
resources.  It  is  in  no  sense  due  to  the  protective  policy.  If 
in  making  particular  commodities,  for  instance,  silk  goods, 
such  high  wages  cannot  be  paid  to  laborers  under  a  system 
of  free  trade,  it  is  a  proof  that  it  is  not  worth  while  for  us 
to  make  silks.  We  can  get  laborers  in  Europe  to  make 
silks  for  us  at  the  low  rates  of  pay  which  prevail  there.  We 
can  employ  our  own  laborers,  who  are  now  making  silks,  in 
producing  other  commodities — for  instance,  grain  or  cotton 
goods.  In  producing  the  grain  or  cottons  our  laborers  are 
advantageously  employed ;  and  in  exchange  for  these  com- 
modities we  can  get  from  the  foreign  laborers  more  silks 
than  our  domestic  laborers  can  produce  at  home. 


CHAPTER  XXXI. 

FREE  TRADE  SHOULD  BE  THE  ULTIMATE  END 
AND  AIM  OF  TARIFF  LEGISLATION.* 

BY  EX-PRESIDENT  JAMES  A.  GARFIELD. 


I  STAND  now  where  I  have  always  stood  since  I  have 
been  a  member  of  this  House.     I  take  the  liberty  of 
quoting,  from  the  Congressional  Globe  of  1866,  the  following 
remarks  which  I  then  made  on  the  subject  of  the  tariff  : 

u  We  have  seen  that  one  extreme  school  of  economists 
would  place  the  price  of  all  manufactured  articles  in  the 
hands  of  foreign  producers  by  rendering  it  impossible  for 
our  manufacturers  to  compete  with  them;  while  the  other 
extreme  school,  by  making  it  impossible  for  the  foreigner  to 
sell  his  competing  wares  in  our  market,  would  give  the 
people  no  immediate  check  upon  the  prices  which  our  manu- 
facturers might  fix  for  their  products.  I  disagree  with  both 
these  extremes.  I  hold  that  a  properly  adjusted  competition 
between  home  and  foreign  products  is  the  best  gauge  by 
which  to  regulate  international  trade.  Duties  should  be  so 
high  that  our  manufacturers  can  fairly  compete  with  the 
foreign  product,  but  not  so  high  as  to  enable  them  to  drive 
out  the  foreign  article,  enjoy  a  monopoly  of  the  trade,  and 
regulate  the  price  as  they  please.  This  is  my  doctrine  of 
protection.  If  Congress  pursues  this  lino  of  policy  steadily, 
we  shall,  year  by  year,  approach  more  nearly  to  the  basis  of 
free  trade,  because  we  shall  be  more  nearly  able  to  compete 

*  U.  S.  House  of  Representatives,  April  1, 1870. 
20  (457) 


458  FREE   TRADE — GARFIELD. 

with,  other  nations  on  equal  terms.  I  am  for  a  protection 
which  leads  to  ultimate  free  trade.  I  am  for  that  free  trade 
which  can  only  be  achieved  through  a  reasonable  protection.'* 

Mr.  Chairman,  examining  thus  the  possibilities  of  the 
situation,  I  believe  that  the  true  course  for  the  friends  of 
protection  to  pursue  is  to  reduce  the  rates  on  imports  wher- 
ever we  can  justly  and  safely  do  so,  and,  accepting  neither 
of  the  extreme  doctrines  urged  on  this  floor,  endeavor  to 
establish  a  stable  policy  that  will  commend  itself  to  all 
patriotic  and  thoughtful  people. 

Modem  scholarship  is  on  the  side  of  free  trade.    ) 


CHAPTER    XXXII. 

TARIFF   REFORM.* 
BY   HON.  WILLIAM   R.  MORRISON. 


INFORMATION"  comes  to  us  from  the  executive  branch 
of  the  Government  that  the  people  are  burdened  with 
unnecessary  taxation,  and  contribute  annually  large  sums  to 
the  public  Treasury  not  necessary  for  public  use.  The 
Treasury  estimate  of  annual  surplus  may  be  fairly  stated  at 
$50,000,000.  Of  this  needless  taxation  and  surplus,  with 
their  attendant  aggravate  evil,  we  cannot  fail  to  relieve  the 
people  without  flagrant  disregard  of  public  duty.  It  is  not 
claimed  that  the  bill  reported  by  the  committee  will  afford 
all  the  relief  demanded  by  the  people's  representatives.  It 
is  but  an  advance  toward  and  a  promise  of  more  complete 
revenue  reform,  to  attain  which  a  general  revision  of  the 
tariff  and  a  more  equitable  adjustment  of  rates  on  its  long 
list  of  dutiable  articles  is  essential.  Such  a  revision  and 
adjustment  was  believed  to  be  unattainable  at  the  present 
session  of  Congress.  A  bill  was  therefore  reported,  having 
for  its  chief  purpose  the  reduction  of  taxes. 

To  protectionists  any  measure  is  without  harmony  and 
without  merit  which  deprives  the  favorites  of  any  bounty, 
though  such  measure  but  responds  to  the  statement  of  the 
fiscal  officers  of  the  Government  that  "the  question  still 
presses,  What  legislation  is  necessary  to  relieve  the  people 
of  unnecessary  taxes? "  A  reduction  " alike"  or  horizontal 

*  House  of  Kepresentatives,  April  15, 1884. 

(459) 


4GO  TARIFF   REFORM — MORRISON. 

is  not  the  most  logical  at  best,  but  none  other  was  prac 
ticable.  The  iate  revision,  after  leaving  the  hands  of  the 
manufacturers  and  their  tariff  commission,  was  completed 
in  a  conference,  of  which  three  leading  members  were 
Messrs.  Morrill,  Kelley,  and  Sherman,  who  have  made  all 
the  tariffs  of  the  past  twenty-five  years.  They  are  the 
chief  architects  of  the  present  system,  and  it  will  not  be 
lightly  said  by  the  friends  of  the  system  that  the  revision, 
as  it  came  from  such  hands,  was  not  consistent  and  har- 
monious. They  laid  some  duties  as  low  as  ten,  others  as 
high  as  one  hundred  per  cent,  and  higher.  These  are  to  be 
reduced  twenty  per  cent.,  or  to  eight  and  eighty.  Relatively 
they  remain  the  same;  to  the  people  they  will  be  a  little 
lighter. 

Gentlemen  are  disturbed  lest  revenues  will  increase  under 
the  bill.  Professedly  they  are  alarmed  at  the  possibility  of 
taking  less  of  the  people's  earnings  while  putting  more 
money  in  the  people's  treasury.  The  enactment  of  a  law 
that  would  accomplish  this  should  not  be  classed  among 
national  calamities. 

The  year  1860  was  a  time  of  plenty.,  The  laborer  for 
wages  was,  at  least,  as  well,  and  the  grower  of  grain  better, 
paid  than  they  are  in  this  year  (1884),  and  in  that  year 
(1860)  of  bounteous  plenty,  our  importations  of  foreign 
goods  were  less  to  the  person,  or  in  proportion  to  population 
than  in  the  years  1880-2. 

ABUSES    OF    THE    PRESENT    TARIFF. 

To  the  list  of  articles  now  imported  free  of  duty,  amount- 
ing to  nearly  one-third  of  all  our  importations,  it  is  proposed 
to  add  salt,  coal,  wood,  and  lumber.  Salt  is  already  freed 
from  tax  for  fishermen,  also  for  the  exporters  of  meats,  to 
lessen  the  cost  of  food  to  the  people  of  other  countries  — 
not  for  our  own.  Coal  is  untaxed  for  use  on  vessels  having 
by  law  the  exclusive  right 'to  the  coasting  trade  or  engaged 


TARIFF  REFORM — MORRISON.          401 

in  the  foreign  carrying  trade,  a  privilege  denied  to  persons 
engaged  in  other  pursuits.  The  revenue  from  wood  and 
lumber  imported,  and  hereafter  to  be  admitted  free  of  duty, 
has  in  the  ten  years  last  past  not  much  exceeded  $10,000,- 
000.  The  census  returns  show  the  domestic  wooden  pro- 
ducts to  exceed  $500,000,000  per  annum.  If  the  average 
duty  of  twenty  per  cent,  on  the  imported  woods  adds  but 
ten  per  cent,  to  the  price  of  that  produced  here  its  increased 
cost  to  the  people  has  been  $500,000,000  in  ten  years.  In 
these  ten  years,  under  the  pretence  of  taxing  this  article 
to  secure  $10,000,000  of  revenue,  we  have  compelled  the 
people  to  pay  $500,000,000  in  bounty  to  encourage  the 
destruction  of  forests  and  the  felling  of  trees,  and  in  the 
same  time  we  have  given  more  than  18,000,000  acres  of 
land  under  the  Timber  Culture  Act  as  bounty  to  encourage 
the  planting  of  other  trees  and  other  forests. 

In  the  estimates  made  by  a  clerk  of  experience  in  the 
Bureau  of  Statistics,  which  actual  payments  on  importations 
show  to  be  but  estimates,  though  based  on  official  data,  the 
bill  would  leave,  it  appears,  in  the  cottons  but  two  articles 
of  cotton  yarns,  not  the  finest,  dutiable  above  forty  per 
cent.;  in  woolens  but  one  — coarse  carpet  wool,  which  we 
do  not  produce  —  above  sixty  per  cent.,  and  in  iron  and 
steel  but  few  above  fifty  per  cent.  These  rates  have  been 
fixed  as  the  limit,  above  which  on  these  articles  no  duty 
shall  be  collected.  The  present  rate  on  the  finest  cotton  is 
forty  per  cent.,  and  yet  it  is  an  unquestioned  fact,  as  shown 
by  invoices  and  payments  made,  that  duties  exceeding  one 
hundred  per  cent,  (exceeding  the  first  cost),  are  exacted  and 
paid  on  cotton  goods,  the  duty  upon  which  is  in  the  esti- 
mates referred  to,  stated  to  be  less  than  twenty  per  cent. 
The  same  is  true  of  iron  and  steel  in  different  degrees.  In 
the  woolen  schedule  these  abuses  are  more  glaring.  In  all 
they  result  from  enormities  hidden  and  concealed,  both  in 
classification  of  articles  and  rates  of  duty.  The  limit  of 


462  TARIFF  REFORM MORRISON. 

forty,  fifty,  and  sixty  per  cent,  on  the  cotton,  metal,  and 
woolen  schedules  is  intended  to  expose  and  remedy  these 
hidden  enormities. 

Those  really  desirous  of  affording  some  relief  from  exist- 
ing abuses  will  not  fail  to  find  their  opportunity  in  removing 
taxes  yielding  $8,000,000  on  sugar,  as  much  on  cotton  and 
woolen  goods,  and  $14,000,000  on  other  articles  used  in 
every  home. 

DECEPTIVE    CHARACTER    OP    THE    LATE    REVISION. 

The  insufficient,  not  to  say  deceptive  character  of  the  late 
revision,  the  manner  of  making  it,  and  the  circumstances 
attending  its  adoption,  alike  forbid  that  it  should  be  perma- 
nent. "When  it  was  being  forced  upon  the  country  with 
assumptions  and  assurances  which  have  not  been  verified,  I 
warned  its  authors  it  would  give  no  contentment  to  the 
public  mind  and  no  rest  from  agitation,  because  it  did  not 
afford  the  relief  admitted  to  be  a  measure  of  justice  by  the 
commission  packed  to  perpetuate  existing  abuses.  I  said 
then  that  its  authors,  in  and  out  of  Congress,  but  deceived 
themselves  if  they  expected  from  this  measure  so  much  as 
a  temporary  settlement.  In  a  speech  made  in  January  last 
at  Columbus,  Ohio,  Delano,  a  protectionist,  long  a  member 
of  Congress  and  a  member  of  President  Grant's  Cabinet, 
said  substantially  that  of  his  own  personal  knowledge  the 
Tariff  Commission  was  secured  by  the  manufacturers,  whose 
salaried  agent  they  caused  to  be  made  its  president,  and,  as 
their  agent  here,  after  his  and  his  employers'  commission 
had  made  its  report  (his  own  report),  he  secured  many 
changes  in  it,  greatly  to  the  advantage  of  manufacturers.  I 
hardly  need  say  that  a  revision  procured  through  such 
agencies  and  methods  is  entitled  to  no  respect  whatever. 

It  is  correctly  said  that  a  tariff  too  low  necessitates  change 
to  obtain  needed  revenue.  It  is  equally  true  that  when  too 
high,  as  ours  now  is;  change  is  necessary  to  avoid  a  surplus 


TARIFF   REFORM — MORRISON.  463 

from  imports  in  which  the  duty  is  not  prohibitory.  The 
only  security  from  agitation  and  change,  therefore,  is  to 
confine  the  taxing  power  to  its  rightful  purpose  by  obtain- 
ing  revenue  limited  to  the  necessities  of  the  Government. 
When  no  more  revenue  is  needed  by  the  Government  of 
the  people  it  has  attained  the  limit  of  its  power  to  tax  the 
people. 

Estimates  based  on  the  census  statistics  show  that  as  many 
as  18,000,000  of  our  people  do  some  work  or  are  occupied 
in  some  business,  and  that  the  average  earnings  of  at  least 
16,000,000  of  these  do  not  much  exceed  three  hundred  dol 
lars,  and  is  wholly  consumed  in  means  of  daily  subsistence. 
They,  too,  are  the  millions  who  in  shop  and  field  strike  the 
blows  of  all  production.  All  the  accumulation  of  and 
boasted  additions  to  our  national  and  individual  wealth 
go  to  one-tenth  of  those  who  earn  it,  and  of  these  a  few 
appropriate  the  great  mass  of  the  savings  of  the  people,  and 
are  enriched  by  the  profits  of  the  labor  of  other  men.  Like 
estimates  will  show  that  the  few  who  profit  most  from  the 
labor  of  all  contribute  little  under  this  system  of  unequal 
taxation  —  not  more  than  two  per  cent,  of  their  savings  — 
while  the  great  mass  of  the  workers,  including  the  depend- 
ent poor,  pay  the  bulk  of  taxes,  all  of  which  is  subtracted 
from  their  too  scanty  means  of  comfortable  living. 

Ours  is  a  very  free  country  of  very  free  men,  both  very 
freely  taxed.  In  the  same  sense  that  we  are  free  men  in  a 
free  country,  freely  taxed,  we  may  be  correctly  named  free 
traders  when  we  insist  that  the  trade  and  commerce  of  the 
country  and  the  necessities  of  comfortable  living  shall  be 
freed  from  all  taxes  not  essential  to  the  Government  for 
public  uses. 

The  amount  required  from  customs  is  dependent  upon 
what  may  be  received  from  internal  revenue.  The  abolition 
of  internal  revenue  means  free  and  cheaper  liquors,  but 
with  heavier  taxed  and  higher  priced  sugar  and  other 


464  TARIFF   REFORM — MORRISON. 

articles  essential  in  every  household.  I  am  not  called  upon 
to  defend  the  system,  which  has  many  abuses.  Of  the  two 
systems  it  is  the  cheaper  in  administration  —  immensely 
cheaper  in  its  results.  The  spies  and  informers  complained 
of  are  common  to  both.  So  offensive  is  the  import  system 
that  gentle  women  are  required  for  its  execution  in  part. 
The  repeal  of  internal  revenue  means  more  than  additional 
cost  of  living  and  privation  to  the  poor.  It  means  a  per" 
manent  public  debt  which  few  owe  and  many  pay,  and 
which  corrupts  administration.  While  we  cannot  doubt  the 
existence  of  great  wrongs  in  the  execution  of  internal 
revenue  laws,  especially  in  the  South  Atlantic  States,  many 
of  these  may  be  cured.  Neither  is  it  because  of  these 
abuses  of  administration  that  the  abolition  of  the  liquor  and 
tobacco  taxes  is  demanded  in  the  States  far  north  and  sub- 
stantially free  from  these  flagrant  abuses. 

THE    GREAT    NAME    OF   JEFFERSON. 

Mr.  Jefferson  has  been  summoned  here  as  often  as  four 
times  in  a  single  day  and  made  to  bear  testimony  to  the 
"infernal"  character  of  a  tax  on  whisky.  It  was  Mr.  Jef- 
ferson who  said :  "  Public  debt  is  a  moral  canker  from  which 
we  ought  to  emancipate  posterity."  It  was  Mr.  Jefferson 
who  said.  "Foreign  spirits,  wines,  teas,  coffee,  cigars,  and 
salt  are  articles  of  as  innocent  consumption  as  broadcloth 
and  silks,  and  ought,  like  them,  to  pay  but  the  average,  the 
ad  valorem  duty  of  other  imported  comforts.  All  of  them 
are  ingredients  in  our  happiness,  and  the  Government  which 
steps  out  of  the  ranks  of  the  ordinary  articles  of  consump- 
tion to  select  and  lay  under  disproportionate  burdens  a 
particular  one  because  it  is  a  comfort,  pleasing  to  the  taste 
or  necessary  to  health,  and  will  therefore  be  brought,  is  in 
that  particular  a  tyranny." 

It  is  a  little  singular  that  Mr.  Jefferson  should  be  so  often 
summoned  here  to  tell  us  so  little  when  he  knew  so  much. 


TARIFF   REFORM — MORRISON.  465 

He  was  not  made  to  bear  witness  to  the  moral  canker  and 
corrupting  influence  of  a  public  debt  or  to  say  that  all  in- 
dustries are  most  thriving  when  left  most  free  to  individual 
enterprise;  that  taxes  on  consumption  to  be  just  must  be 
uniform;  that  protection  is  only  justifiable  "to  foster  for  a 
while  certain  infant  manufactures  until  they  are  strong 
enough  to  stand  against  foreign  rivals,  but  when  evident 
that  they  will  never  be  so  it  is  against  right  to  make  the 
other  branches  of  industry  support  them." 

At  the  last  session,  while  promising  to  reduce  tariff  taxes, 
these  new  disciples  of  Jefferson  so  increased  them  on  manu- 
factures of  iron  and  other  metals,  including  cotton  and 
other  machinery,  that  the  planter  who  exchanged  one  hun- 
dred bales  of  cotton  for  any  of  these  manufactures  must,  on 
his  return,  surrender  to  the  Government  the  foreign  proceeds 
of  forty-five  for  the  privilege  of  selling  or  using  that  re- 
ceived in  exchange  for  the  other  fifty-five  bales.  All  makers 
of  iron  products,  with  their  especial  representatives,  pro 
fessed  reverence  for  the  great  name  of  Jefferson  in  contin- 
uance of  this  abuse. 

THE   WAGE    QUESTION THE    OHIO    PLATFORM. 

During  more  than  half  of  the  last  ten  years  wages  have 
been  as  low  or  lower  than  before  the  adoption  of  the  taxing 
policy  as  a  pretended  means  of  making  wages  higher.  They 
are  lower  still  when  compared  with  the  use  which  those 
who  earn  wages  are  compelled  to  make  of  them,  for  they 
must  use  them  to  obtain  the  means  of  comfortable  living. 
Counted  by  what  our  laborers  are  able  to  accomplish  and 
produce  in  quantities,  and  especially  in  values,  wages  here 
are  but  little  more  in  many  industries  than  the  wages  paid 
by  our  chief  commercial  rivals. 

There  is  but  one  horizontal  reduction  for  which  our  oppo- 
nents are  willing  to  legislate — the  reduction  of  wages — and 
20* 


466  TARIFF  REFORM — MORRISON. 


this  their  favorites,  with  or  without  regard  to  legislation, 
are  now  executing  day  by  day  with  cruel  regularity. 

In  the  opinion  of  the  minority  members  of  the  committee, 
representing,  as  they  do,  the  friends  of  the  prevailing  policy, 
the  cure  for  whatever  of  national  ills  exist,  so  far  as  they 
result  from  taxation,  is  to  be  found  in  higher-priced  clothing 
and  other  articles  useful  in  fields,  mines,  and  homes,  for 
that  is  what  is  meant  by  higher-taxed  wool,  fence-rods,  cot- 
ton bands,  and  tin  plates.  Some  of  our  friends  here  would 
cure  the  ills  of  overtaxation  with  a  declaration  of  purpose, 
the  execution  of  which  they  would  carefully  avoid.  And 
here  is  the  declaration.  It  is  called  the  Ohio  platform: — 

u  We  favor  a  tariff  for  revenue  limited  to  the  necessities 
of  government,  economically  administered  and  so  adjusted 
in  its  application  as  to  prevent  unequal  burdens,  encourage 
productive  industries  at  home,  afford  just  compensation  to 
labor,  but  not  to  create  or  foster  monopoly." 

A  tariff  for  revenue  limited  to  the  necessities  of  the  gov- 
ernment is  demanded  by  this  plan  of  relief.  Is  the  tariff 
now  so  limited  ?  If  not,  then  why  refuse  to  limit  it?  Who 
among  the  representatives  of  the  goodly  people  of  that  State 
who  made  this  declaration  believes  it  is  so  limited?  Who 
among  them  believes  the  pending  bill  will  reduce  the  reve- 
nue below  the  necessities  of  the  Government?  These  are 
questions  to  which  the  plain  people  of  the  country  want  an 
answer.  They  will  demand  to  know  why  tariff  taxes  are 
not  removed  in  part  if  they  are  beyond  the  revenue  limit. 
Do  gentlemen  expect  to  escape  responsibility  because  rates 
are  not  rightly  adjusted?  The  adjustment  will  be  the  same 
when  reduction  is  made,  out  whatever  of  monopoly  belongs 
to  it  will  be  fostered  by  twenty  per  cent,  less  than  it  now  is. 

If  this  platform  has  an  honest  meaning  it  is  that  the 
tariff  shall  be  lowered  to  a  revenue  basis.  And  gentlemen 
but  deceive  themselves  who  expect  the  people  will  be  de- 
ceived by  a  refusal  to  legislate  in  accordance  with  this  de- 


TARIFF   REFORM — MORRISON.  467 

clared  purpose.  If  the  protection  policy  is  to  be  the  contin- 
uing policy  of  the  Government  it  will  be  and  ought  to  be 
intrusted  to  its  friend,  the  Republican  party. 

THE    OLD,    OLD    STORY. 

Every  argument  in  support  of  the  protective  policy  is 
based  on  the  assumption  that  any  considerable  tariff  modifi- 
cation, especially  a  modification  to  the  revenue  basis,  will 
destroy  manufacturing  industries,  compel  the  abandonment 
of  shops  and  mills  and  force  those  now  engaged  in  them  to 
other  employments.  This  is  an  old,  old  story.  It  was  told 
of  manufacturing  industries  in  their  infancy,  it  will  be  told 
when  protection  brings  them  to  decay.  Eight  years  ago  I 
introduced  the  first  bill  for  free  quinine  and  providing  for 
untaxed  alcohol  for  use  in  making  it.  At  once  it  was  in- 
sisted that  quinine  making  would  become  a  lost  art  among 
us  if  such  a  bill  should  pass  into  a  law,  and  it  did  not  then 
pass.  Later  on,  when  the  story  of  free  quinine  got  among 
the  people,  another  placed  the  bill  before  the  House,  omit- 
ting the  free  alcohol  provision,  and  the  bill  became  a  law, 
protectionists  themselves  feeling  obliged  to  vote  for  it.  The 
great  Philadelphia  house  did  not  go  into  decline,  but  con- 
tinued its  business  of  quinine  making  successfully  as  the 
second  largest  quinine  establishment  in  the  world.  So  every 
legitimate  industry  would  go  on  with  a  revenue  tariff. 

DIFFERENCE    IN    WAGES. 

It  is  insisted  that  wages  are  so  much  higher  here  than  in 
the  countries  seeking  our  markets  that  revenue  duties  will 
not  equalize  the  difference  in  the  cost  of  production.  Con- 
ceding the  truth  of  what  is  not  true,  that  the  foreign  rival 
must  pay  for  the  privilege  of  selling  in  our  markets  a  sum 
equal  to  the  difference  in  wages  to  enable  the  home  producer 
to  sell  with  reasonable  profit,  let  us  see  if  revenue  rates  will 
compensate  for  that  difference.  The  census  value  of  manu- 


468  TARIFF   REFORM — MORRISON. 

factures  for  1880  was  $5,369,579,191.  The  wages  paid  in 
making  them  were  $947,953,795.  The  difference  in  cost  of 
goods  is  said  to  be  the  difference  in  the  cost  of  wages.  But 
suppose  the  difference  between  the  cost  here  and  the  cost 
abroad  amounts  to  all  the  wages  paid  there  then  these  man- 
ufactures would  cost  abroad  $4,421,625,396.  Suppose  the 
average  rate  of  duty  which  the  bill  before  the  House  leaves 
at  thirty-three  per  cent,  were  reduced  to  twenty-two  per 
cent,  and  at  that  rate  this  $4,421,625,396  in  value  of  goods 
was  imported,  it  would  cost  the  importer,  at  that  rate  of 
twenty-two  per  cent.,  $972,757,587,  which  not  only  makes 
up  for  the  difference  in  wages,  but  exceeds  all  the  wages 
paid  for  making  all  the  goods. 

If  those  who  claim  especial  friendship  for  manufacturing 
industries  will  insist  on  their  going  into  decay  and  then 
dying  some  other  apology  must  be  found  for  their  taking  off 
than  the  removal  of  unnecessary  taxes. 


CHAPTER  XXXIII. 

BUSINESS  DEPRESSION  AND  REVENUE  REFORM. 

A  LETTER  ADDRESSED  BY  ABRAM  S.  HEWITT  TO  THE 
ALBANY  "ARGUS"  DEC.  26,   1883. 


NEW  YORK,  December  26,   1883. 

DEAR  SIR:  I  am  in  receipt  of  your  letter  in  which,  you 
say:  "The  Argus  is  now  engaged  in  an  inquiry  into 
the  causes  and  effect  of  the  present  depression  of  the  iron 
industry.  It  is  especially  desired  to  be  known  what  relation 
this  state  of  thing  bears  to  existing  tariff  conditions."  You 
ask  my  opinion  in  reference  to  these  points. 

I  answer  that  the  proximate  cause  of  the  present  depres- 
sion  of  the  iron  industry  is  to  be  found  in  the  fact  that  the 
capacity  for  producing  iron  is  in  excess  of  its  actual  con- 
sumption, not  only  in  this  country,  but  in  those  foreign  coun- 
tries which  are  large  producers  of  iron  and  steel.  When 
the  supply  exceeds  the  demand  prices  fall.  Establishments 
which  cannot  produce  at  the  current  prices  without  loss  are 
compelled  to  suspend  operations,  and  thus  comes  the  actual 
depression  to  which  you  refer.  The  ultimate  causes  of  such 
a  state  of  things  are  unusually  manifold;  sometimes  they  are 
too  obscure  to  be  discovered  with  certainty.  For  example: 
The  influence  of  abundant  harvests,  or  of  a  failure  of  crops, 
upon  the  general  condition  of  industry  is  unquestioned. 
Yet  these  very  causes  may  produce  prosperity  in  some 
branches  of  business  while  they  produce  depression  in  others. 

.(469) 


470       BUSINESS    DEPRESSION    AND    REVENUE    REFORM. 

So  in  regard  to  the  influence  of  tariff  legislation.  If  duties 
are  suddenly  raised  at  a  time  when  there  is  a  demand  for 
the  foreign  product,  prices  will  go  up  and  the  iron  business 
will  be  prosperous.  If,  on  the  other  hand,  duties  are  re- 
duced, so  as  to  admit  of  a  larger  supply  of  the  foreign  pro- 
duct, the  domestic  business  will  be,  for  the  time  being,  un- 
favorably affected,  and  depression  will  result. 

These,  however,  are  only  immediate  and  temporary  effects. 
As  a  matter  of  fact,  prior  to  1878,  under  the  highest  tariff 
ever  known  in  this  county,  we  had  a  long  period  of  depres- 
sion in  the  iron  business.  But  about  that  time  railway  en- 
terprises  were  undertaken  on  a  large  scale,  producing  a  sudden 
demand  for  more  iron  and  steel  than  the  world  was  prepared 
to  supply.  Prices  advanced  all  over  the  world,  and  to  these 
prices  was  added  the  very  high  rate  of  duty  then  prevailing 
upon  foreign  iron  brought  into  this  country.  The  profits  of 
the  domestic  business  became  excessive,  and  the  owners  of 
existing  works  proceeded  to  enlarge  their  capacity  to  the 
utmost, -in  order  to  gather  this  harvest  of  great  profits,  while 
new  capital  was  attracted  into  a  field  in  which  the  returns 
were  known  to  be  abnormally  large.  The  business  being 
thus  overdone,  a  glut  of  iron  resulted,  and  the  reaction  has 
brought  about  a  state  of  things  even  worse  than  that  which 
existed  prior  to  1878. 

The  evil  from  which  we  now  suffer  is,  therefore,  largely 
due  to  the  fact  that  the  war  tariff  imposed  higher  duties  than 
were  needed  for  protection,  thus  giving  excessive  profits  to 
the  manufacturers  in  a  period  when  the  profits  would  have 
been  large  enough  without  such  high  protective  duties.  We 
are  suffering  from  unnatural  stimulation,  which  aggravated 
the  excitement  when  the  public  interest  required  that  it 
should  be  allayed,  and  now  aggravates  the  depression  by  the 
excessive  capacity  for  production  which  it  engendered.  How 
long  this  depression  will  continue  no  man  can  predict.  But 


BUSINESS    DEPRESSION    AND    REVENUE   REFORM.      471 

inasmuch  as  eras  of  prosperity  and  depression  succeed  each 
other  in  cycles,  it  is  certain  that  sooner  or  later  we  shall  come 
again  to  the  period  when  the  demand  for  iron  will  exceed  the 
supply.  Unless  our  revenue  legislation  be  meanwhile  reform- 
ed, we  shall  then  have  a  repetition  of  the  experience  through 
which  we  passed  since  1878,  an  experience  which  shows  that 
excessive  profits  are,  in  reality,  of  no  real  benefit  either  to 
the  manufacturers,  except  in  rare  instances,  or  to  the  country 
at  large,  while  the  evils  resulting  from  them  are  serious. 
They  are  especially  injurious  to  the  workingmen  of  the 
country,  who  are  the  chief  sufferers  when  the  inevitable  re 
action  to  unnatural  expansion  narrows  the  field  of  employ 
ment  for  labor. 

The  lesson  to  be  derived  from  this  experience  is  that  the 
duties  on  all  kinds  of  iron  should  never  exceed  the  lowest 
possible  point  which,  in  time  of  depression,  will  protect  the 
domestic  market  from  the  flood  of  foreign  iron  which  other- 
wise might  be  poured  into  its  lap.  Such  rates  of  duty,  pro- 
vided they  are  specific,  will  on  the  average  yield  the  largest 
amount  of  revenue,  because  when  the  price  rises  and  the 
producer  no  longer  needs  protection,  the  consumer,  who  does 
need  protection,  can  then  supply  his  wants  at  a  fair  price 
in  the  foreign  market  without  paying  an  increased  duty,  if 
he  cannot  get  equally  fair  terms  at  home. 

Moreover,  the  experience  of  all  commercial  nations  has 
shown  that  moderate  specific  duties  afford  the  only  safeguard 
against  frauds  in  the  revenue,  as  well  from  smuggling  as 
from  undervaluation  in  the  invoices.  The  blind  adherence 
to  ad  valorem  duties  in  our  existing  tariff  has  only  served  to 
throw  the  importing  trade  into  the  hands  of  foreigners  and 
to  drive  our  reputable  American  houses  from  this  business. 

The  reduction  of  extra-protective  duties  to  a  reasonable 
standard  of  specific  duties  is  therefore  the  only  practicable 
means  of  avoiding  an  unhealthy  expansion  of  business  when 


47^       BUSINESS    DEPRESSION    AND    REVENUE    REFORM. 

it  is  active.  Extra-protective  duties  merely  result  in  over- 
production, in  the  general  derangement  of  industry,  and  in 
consequent  suffering  to  the  workingmen  by  the  loss  of  em- 
ployment  and  the  reduction  of  wages.  They  must  be  made 
to  realize  that  the  only  fund  out  of  which  their  wages  can 
be  paid  is  'produced  by  the  money  which  is  received  for  the 
product  of  industry.  Out  of  this  fund  must  first  be  paid 
the  cost  of  the  raw  material  and  the  next  the  remuneration 
for  the  capital  employed  in  the  work  of  production.  What 
remains  is  the  amount  available  for  the  payment  of  wages. 
Hence  the  cheaper  we  can  get  raw  materials  and  capital  the 
more  we  can  pay  for  the  labor  engaged  in  manufactures. 
High  rates  of  interest  and  high-priced  raw  materials  mean, 
therefore,  lower  wages  for  labor,  while  cheap  raw  materials 
and  cheap  capital  mean  higher  wages  for  labor.  The  work- 
ingmen thus  have  an  interest  direct  and  immediate,  in  remov- 
ing the  duty  from  raw  materials,  as  well  in  the  iron  business 
as  in  every  other  branch  of  industry  carried  on  in  this 
country.  By  raw  materials  I  mean  fuel,  all  food  products, 
all  materials  to  which  no  process  of  manufacture  has  been 
applied,  all  metallic  ores  and  all  waste  products  which  are 
fit  only  to  be  manufactured. 

So  far  sis  any  relief  can  be  provided  by  legislation  for  the 
existing  state  of  affairs  the  remedy  must  be  found,  first,  in 
freeing  raw  materials  from  all  duties;  and,  secondly,  in  im- 
posing rates  of  duty  on  manufactured  products  not  more 
than  sufficient  to  make  good  the  difference  in  the  amount 
paid  for  labor  in  the  production  of  any  given  article  in  this 
country,  as  compared  with  the  amount  paid  for  the  same 
labor  in  other  countries  with  which  we  compete.  For  this 
purpose  the  incidental  protection  afforded  by  revenue  duties 
will,  as  a  rule,  be  found  sufficient  when  any  protection  is 
needed. 

I  am  aware  that  this  last  proposition  involves  the  protec- 


BUSINESS    DEPRESSION    AND    REVENUE   REFORM.      473 

tive  idea  to  some  extent,  but  to  no  greater  extent  than  is  the 
logical  outgrowth  of  our  past  legislation.  If  we  had  never 
had  protection  we  should  not  be  required  to  pay  any  atten- 
tion to  the  question  of  rates  of  labor,  which  are  the  result, 
not  of  protection,  but  of  other  conditions  entirely  independ- 
ent of  legislation.  But  the  protective  system  has  undoubtedly 
built  up  some  branches  of  industry  which  otherwise  might 
not,  in  consequence  of  the  higher  rate  of  wages,  have 
existed.  Inasmuch  as  this  is  their  misfortune  and  not  their 
fault,  no  sensible  legislator  would  strike  these  industries 
down  by  the  sudden  abrogation  of  the  protective  system. 
We  should,  nevertheless,  endeavor  gradually  to  reduce  its 
evils  to  a  minimum,  until  in  the  progress  of  time  it  shall  have 
given  way,  under  natural  laws,  to  a  better  and  sounder  con- 
dition  of  affairs. 

But  in  this  assurance  of  inevitable  progress  there  is  to  be 
found  no  justification  for  the  further  maintenance  of  duties 
which  only  tend  to  reduce  the  wages  of  labor  without  confer- 
ring benefit  on  any  interest  whatever;  duties  which  only 
impair  our  ability  to  sell  commodities  in  the  open  markets  of 
the  world,  and  hinder  the  natural  and  healthy  growth  of 
business.  All  such  unnecessary  and  hurtful  obstructions 
should  be  removed  without  delay,  and  it  will  be  a  mockery 
of  duty  if  Congress  should  fail  to  open  the  way  to  "  freer 
trade  "and  wider  markets  for  our  products  through  any  fear 
of  consequences  to  politicians  who  have  not  the  courage  of 
their  convictions,  or  have  no  other  convictions  than  the 
desire  for  office.  The  mere  politician  follows  public  opinion ; 
the  true  statesman  instructs  it.  His  constant  aim  should  be 
to  make  clear  to  those  who  depend  upon  their  daily  labor  for 
their  daily  bread  the  real  basis  upon  which  their  welfare 
rests,  and  then  to  trust  to  their  intelligence  and  votes  for 
support.  Success  on  any  other  condition  would  be  dishonor. 
Any  party  which  expects  to  get  power  by  playing  the  game 


474      BUSINESS   DEPRESSION   AND    REVENUE   REFORM. 

of  "hide  and  seek  "  in  politics  does  not  deserve,  and  will  not 
gain,  the  confidence  of  the  country. 

The  only  living  issue,  then,  between  the  two  great  political 
parties  which  divides  the  country,  as  I  understand  it,  is  this: 
whether  the  revenue  system  shall  be  reformed,  and  upon 
what  basis  of  principle  it  shall  be  settled. 

The  Republican  party  believes  in  the  doctrine  of  protec- 
tion for  the  sake  of  protection.  It  insists  that  protective 
duties  are  constitutional,  and  are  necessary  in  order  to  insure 
to  the  workingmen  a  fair  remuneration  for  their  labor.  It 
would  therefore  impose  duties  as  nearly  prohibitory  as  possi- 
ble on  articles  produced  in  this  country,  and  as  a  policy 
make  free  those  articles  which  are  not  or  cannot  be  produced 
here. 

The  Democratic  party  insists  that  the  Constitution  merely 
provides  for  the  imposition  of  duties  for  revenue,  and  not 
for  protection,  except  so  far  as  duties  so  imposed  necessarily 
afford  incidental  protection ;  that  protective  duties  cannot  and 
do  not  favorably  affect  the  general  rate  of  wages;  that  legis- 
lation is  powerless  to  permanently  increase  the  remuneration 
for  labor,  although  it  may  seriously  impair  it ;  that  protection 
can  only  divert  labor  and  capital  from  more  profitable  into 
less  profitable  channels  of  industry.  It  recognizes,  however, 
the  fact  that  the  protective  system  has  been  so  long  in  force 
and  is  so  intrenched  in  judicial  construction  as  to  make  it 
idle  now  to  raise  the  constitutional  question ;  that  the 
amount  of  capital  and  labor  now  engaged  in  the  protected 
industries  is  too  great  to  admit  of  any  legislation  likely  to 
do  them  any  real  injury ;  that  the  only  reform  now  possible 
is  in  the  reduction  and  removal  of  duties  which  are  no 
longer  needed  to  insure  their  continued  existence;  that  these 
excessive  duties  are  in  reality  obstructive  to  their  prosperity; 
that  duties  on  raw  materials  should  be  removed,  because 
such  duties  constitute  a  practical  deduction  from  the  wages 


BUSINESS   DEPRESSION    AND    REVENUE   REFORM.      475 


of  labor.  If  the  question  were  an  open  one  the  Democratic 
party  would  prefer  to  raise  the  public  revenue  by  duties 
imposed  upon  articles  not  produced  in  this  country,  and 
trust  to  natural  laws  for  the  development  of  its  industries. 
But  the  question  is  foreclosed  by  the  great  extent  of  the 
protected  industries,  replacing  dead  industries  which  other- 
wise would  have  thriven 

The  Democratic  party  recognizing  the  necessity,  therefore, 
of  reforming  the  tariff  in  such  a  way  as  not  to  deprive  these 
industries  of  the  incidental  protection  afforded  by  reasonable 
revenue  duties,  insists  that  the  protective  system  shall  not  be 
enlarged,  and  believes  that  moderate  duties  producing,  on 
the  average  of  years,  a  sufficient  revenue,  are  adequate  for 
protection  at  the  only  times  when  protection  is  needed — that 
is,  in  bad  times,  when  our  foreign  competitors  would  seek  to 
get  rid  of  their  surplus  product  in  our  markets,  which,  con- 
sidering that  an  idle  population  is  the  greatest  social  calamity, 
we  must  then  preserve,  in  order  to  give  employment  to  our 
labor  engaged  in  the  protected  industries;  that  at  all  other 
periods  extra  protective  duties  merely  give  excessive  profits 
to  one  class  at  the  expense  of  other  classes,  ending  in  over- 
production,  stagnation  of  business,  and  irregular  employment 
for  labor,  powerless  to  protect  itself  against  the  errors  of 
legislation  and  selfish  action  of  capital  striving  for  unreason- 
able profits.  The  condition  of  the  business  of  the  country  at 
this  time  is  conclusive  proof  that  the  protective  system  can- 
not relieve  either  labor  or  capital  from  the  consequences  of 
overproduction,  which  is  its  legitimate  result. 

Between  the  political  parties  representing  these  two  oppos- 
ing views  the  country  is  soon  to  make  its  choice.  The 
Republican  party  offers  no  remedy  for  the  policy  which  has 
produced  the  existing  paralysis  of  industry.  The  Democratic 
party  proposes  to  open  the  way  to  freer  markets,  fuller  trade, 
and  better  wages,  by  abolishing  the  duties  on  raw  materials 


476      BUSINESS    DEPRESSION    AND   REVENUE   REFORM. 

and  removing  the  purely  obstructive  features  of  the  tariff. 
If  the  Democratic  House  shall  frame  and  pass  a  judicious 
measure  of  revenue  reform,  carefully  adjusted  to  the  actual 
condition  of  our  suffering  industries,  and  the  Bepublican 
Senate  shall  refuse  to  concur,  the  issue  will  be  fairly  joined. 
The  people  can  then  decide  whether  the  do-nothing  party 
now  in  power  shall  be  replaced  by  an  administration  which 
will  remove  the  artificial  barries  to  healthy  progress.  When 
this  is  done,  and  not  till  then,  will  the  country  realize  that  it 
is  no  longer  an  infant  at  nurse,  but  a  veritable  giant,  only 
requiring  " ample  room  and  verge  enough"  for  the  free  play 
cf  its  vast  energies.  Sincerely  yours, 

ABBAM  S.  HEWITT. 


CHAPTER   XXXIV. 

THE   FARMERS'  QUESTION.* 

BY  JOHN  L.  HAYES,  LL.D., 
President  of  the  late  Tariff  Commission. 


FARMING     UNDER    OUR   PROTECTIVE     SYSTEM    NOT    UNPROFITABLE. 

LEAVING  for  a  moment  the  consideration  of  the 
u  Golden  Rule  of  trading "  in  its  application  to 
farmers,  let  us  consider  the  assertion  of  fact  that  the  Ameri- 
can  farmers  pay  more  and  get  less  than  any  land -tillers  in 
the  world.  The  fallacy  of  this  statement  consists  in  making 
nominal  prices  paid  and  received,  and  not  actual  balances, 
the  tests  of  successful  farming;  but,  as  broadly  made,  it 
means  nothing  more  nor  less,  and  is  intended  to  give  no 
other  impression  than  that  farming  in  America  yields  less 
net  results,  or  is  more  unprofitable,  than  in  any  other  coun- 
try. This  I  do  not  hesitate  to  declare  to  be  a  palpable  mis- 
statement.  I  assert  that  labor  and  capital  employed  in 
farming  in  America  are  more  productive — that  is,  give  to 
those  pursuing  it  a  greater  capacity  for  consumption  of  gen- 
eral commodities — than  in  any  country  in  the  world.  This 
I  shall  hereafter  show  is  mainly  due  to  our  national  or  pro- 
tective policy.  In  no  other  country,  to  say  nothing  of 
abundant  food,  is  the  agricultural  population  so  well  clad,  so 
well  housed  with  dwellings  so  well  furnished,  and  so  well 
supplied  with  implements  of  labor,  agricultural  and  mechan- 
ical,— in  short,  provided  to  such  extent  and  variety  with 
manufactured  products  of  necessity  or  luxury.  The  testi- 
mony of  foreigners  visiting  this  country,  and  of  our  own 
citizens  who  have  traveled  abroad,  establish  this  point. 

.*  Extract  from  Tract  in  answer  to  Cobden  Club  Tract  by  Mongredien. 

(477) 


478 


THE    FARMERS'    QUESTION. 


AGRICULTURAL    IMMIGRATION. 

The  comparative  productiveness  of  American  farming  is 
demonstrated  by  the  agricultural  emigration  to  this  country, 
especially  from  England,  at  the  present  time.  The  Earl  of 
Derby  declares  that  five  millions  of  British  people  could 
emigrate  with  advantage.  Consul-General  Badeau  says,  in 
a  report  to  our  own  Department  of  State,  "  There  can  be  lit- 
tle doubt  that  a  superior  and  increasing  class  of  emigrants 
from  the  British  Isles  may  be  expected  to  arrive  in  the 
United  States  within  the  next  few  years.  Men  who  have 
hitherto  held  small  farms  and  tilled  them  successfully,  earn- 
ing a  small  but  certain  livelihood,  now,  seeing  the  chances  of 
competency  disappearing,  are  already  contemplating  emigra- 
tion in  large  numbers."  11,646  farmers  and  agricultural 
laborers  have  emigrated  to  the  United  States  from  England 
in  the  last  seven  years,  and  31,988  from  tfie  United  King- 
dom in  the  last  nine  years.*  Mr.  Thomas  Hughes,  a  member 


*  TABLE  showing  the  number  of  Farmers  and  Agricultural  Laborers  who  have 
emigrated  from  the  United  Kingdom  to  the  United  States  within  the  last  nine  years. 
(Prepared  by  the  United  States  Bureau  of  Statistics.) 


Year  ending 
June  30th. 

England. 

Ireland. 

Scotland. 

Wales. 

Isle  of 
Man  and 
Channel 
Islands. 

Great 
Britain, 
not 
further 
specified. 

Total 
for  the 
United 
King- 
dom. 

1871 

1  286 

2  793 

4079 

1872 

2,116 

3042 

5,158 

1873 

2,427 

2,862 

542 

14 

5,845 

1874 

2,282 

1,537 

764 

15 

3 

.   ... 

4,601 

1875 

1,622 

1,050 

434 

15 

3,121 

1876 

1,552 

594 

223 

21 

3 

2,393 

1877 

1,329 

564 

334 

12 

t 

2,239 

1878 

1,179 

685 

293 

15 

2,172 

1879 

1,255 

733 

375 

17 

2,380 

Total,       \ 
9yrs.    J 

11,646 

11,427 

2,965 

109 

6 

5,835 

31,988 

THE  FARMERS'  QUESTION.  479 

of  Parliament  and  doubtless  of  the  Cobden  Club,  with  the 
Earl  of  Airlie  and  others  of  social  distinction,  is  now  visiting 
this  country  to  establish  an  agricultural  colony  in  Tennessee, 
not  for  common  farmers,  but  to  open  a  field  of  agricultural 
enterprise  to  the  younger  sons  of  British  noblemen  and  gen- 
tlemen. Thus  the  class  of  men  to  which  the  members  of  the 
Cobden  Club  belong  practically  assert  that  there  are  no 
impediments  in  America  to  successful  farming. 

SUCCESSFUL      FARMING     DUE     LESS     TO     NATURAL     ADVANTAGES 
THAN     A     WISE     POLICY. 

It  rnay  be  said  that  American  farming  is  successful  on 
account  of  our  superior  natural  advantages  of  cheap  and 
fertile  land  and  favorable  climate.  To  this  I  answer, 
although  I  anticipate  a  more  extended  argument,  that  these 
are  advantages  only  when  improved  by  a  wise  economical 
policy.  In  the  sugar  and  coffee  districts  of  Cuba,  where 
Nature  has  lavished  her  richest  gifts  of  soil  and  climate, 
there  exists,  in  the  opinion  of  a  world- wide  traveler,  "the 
most  desperate  and  deplorable  poverty  on  the  face  of  the 
earth."  The  power  of  consumption  of  manufactured  com- 
modities, which  so  strikingly  illustrates  the  present  pros- 
perity of  our  farmers,  have  been  absolutely  coeval  with  the 
establishment  of  the  protective  policy,  which  has  given  them 
a  home  market;  made  consumers  out  of  competitors;  saved 
cost  of  transportation  of  articles  to  be  bought  or  sold;  made 
manufactured  products,  attainable  by  exchange  of  farm 
products,  cheap  by  domestic  competition,  and  desirable,  be- 
cause fabricated  as  can  only  be  done  at  home,  in  exact  con- 
formity to  their  wants.  Soil  and  climate  were  just  as 
favorable  sixty  years  ago,  when  the  farmers  of  this  country 
were  deplorably  wanting  in  all  the  comforts  and  luxuries  of 
life  except  those  produced  on  their  own  farms.  I  myself 
remember  seeing  the  wagon-trains  of  emigrant  New  Eng- 
land farmers  on  their  weary  march  to  Ohio  because  there 


480  THE  FARMERS'  QUESTION. 

was  no  prospect  of  anything  but  bare  subsistence  at  home. 
I  remember  the  time  when  scarcely  a  farmer's  house  in  the 
country  was  painted,  when  hardly  one  farmer  in  ten  had  a 
greatcoat  and  none  wore  underclothing,  when  even  the 
implements  of  husbandry  were  in  so  little  demand  or  so 
hardly  obtainable  that  the  largest  manufacturer  of  agri- 
cultural implements  in  the  country  made  but  ten  dozen 
shovels  a  week,  while  his  successor  now  makes  two  thousand 
dozen  in  the  same  time.  This  was  the  time  when  General 
Jackson  uttered  his  famous  exclamation,  "  Where  has  the 
American  farmer  a  market  for  his  produce  ?  "  The  older 
men  of  our  community  observe  that  no  change  in  our  social 
aspect  is  so  remarkable  as  the  improved  condition  of  our 
agricultural  population  and  their  increased  consumption  of 
manufactured  commodities,  —  a  social  change  sufficiently 
illustrated  by  the  simple  fact  that  our  city  and  country  pop- 
ulations  are  now  absolutely  undistinguishable  by  their  dress. 
This  change  I  assert,  without  attempting  at  present  to  fully 
verify  my  assertion,  commenced  with  the  passage  of  the 
tariff  of  1816,  which  gave  the  first  impulse  to  our  manu- 
facturers, and  was  first  conspicuously  manifest  after  the 
tariff  of  1824,  and  its  complement,  the  tariff  of  1828,*  — 
the  highest  we  have  ever  had,  with  rates  of  duty  averaging 
forty^one  per  cent,  upon  imports  subject  to  duty;  while  the 
prosperity  of  our  agricultural  population  has  continued  to 
fall  and  rise  with  the  ebb  and  flow  of  the  protective  policy, 
culminating  in  the  long  protective  period  of  the  last  twenty 
years.  If  the  fact  of  our  agricultural  prosperity  is  demon- 
strated, as  it  seems  to  be  beyond  all  question  by  the  admis- 
sions I  have  cited,  what  becomes  of  the  assertion  that  Amer- 
ican farmers  "  pay  more  and  get  less  than  any  land-tillers 
in  the  world "  ?  This  position  failing,  the  keystone  falls 

*  Mr.  Clay  says  of  this  period,  "If  the  term  of  seven  years  were  to  be  selected 
of  the  greatest  prosperity  this  people  have  enjoyed  since  the  establishment  of 
their  Constitution,  it  would  be  exactly  that  period  of  seven  years  which  immedi- 
ately followed  the  passage  of  the  tariff  of  1824." 


THE  FARMERS'  QUESTION.  481 


from  the  arch  so  skillfully  builded,  and  the  whole  structure 
of  argument  topples  to  the  ground.  I  might  here  rest  my 
case  if  experience  had  not  proved  the  value  of  accumulated 
argument,  and  if  it  were  not  instructive  to  consider  other 
fallacies  in  this  appeal  no  less  unsound  and  delusive. 

THE    MAXIM,     "BUY    CHEAP   AND    SELL    DEAR,"    CONSIDERED. 

A  fallacious  argument  to  be  successfully  met  must  be 
encountered  in  its  very  premises,  and  free  trade  is  delusive, 
because  the  pure  assumptions  upon  which  it  rests  are  incau- 
tiously admitted.  Such  is  the  assumption  that  to  "buy 
cheap  and  sell  dear "  is  the  sole  criterion  of  the  best  eco- 
nomical policy,  private  and  national.  I  maintain  that,  of 
all  classes,  this  rule  is  most  inapplicable  to  farmers,  and 
especially  to  those  of  this  country.  This  doctrine  considers 
men  only  as  purchasers  and  venders.  It  is  the  rule  of  the 
mere  trader,  or  rather  huckster,  who  occupies  himself  solely 
with  the  net  present  profit  and  loss  result  in  his  cash 
account.  It  is  a  rule  only  for  to-day  and  has  no  notion  of  a 
to-morrow.  The  farmer  is  not  a  mere  purchaser  and  vender; 
he  is  eminently  a  producer;  although  he  properly  seeks  to 
make  good  bargains  in  the  exchange  of  what  he  already  has, 
it  is  infinitely  more  important  for  him  to  put  himself  in  the 
way  of  producing  more.  Every  farm  is  a  little  State  of 
itself,  and  has  or  should  have  its  own  national  policy,  as  it 
were,  looking  more  to  the  future  than  the  present.  To  the 
husbandman  the  principal  object  is  the  improvement  of  his 
farm,  for  it  is  well-known  that  nearly  all  the  accumulations 
of  our  farmers  are  represented  by  their  improved  land. 
Ignoring  the  temporary  policy  of  the  trader,  he  clears 
forests  and  grubs  up  swamps  to  increase  his  permanent 
power  of  production.  To  have  only  in  view  buying  cheap 
and  selling  dear  would  be  for  him  to  skin  his  land,  to  part 
with  his  seed-corn,  to  sell  his  hay  instead  of  feeding  it  to 
stock,  to  sap  the  soil  each  year  of  its^^in^ntepf  fertility 

21 

THE 


482  THE  FARMERS'  QUESTION. 

without  restoring  them,  to  make  butter  of  oleomargarine 
and  sell  it  as  "  gilt-edged,"  to  buy  Brummagen  axes,  shovels, 
and  hoes,  to  wear  British  shoddy-cloth  instead  of  the  sound 
product  of  his  own  flocks  worked  up  in  his  responsible 
neighbor's  mill,  —  in  short,  to  live  for  to-day  without 
thought  of  to-morrow,  and  to  be  the  grasshopper  rather 
than  the  ant  of  the  fable.  This  is  not  the  sentiment  of 
American  farmers.  The  most  stable,  long-abiding,  and 
patient  of  all  classes,  more  than  any  others,  in  this  country 
at  least,  they  look  to  their  interests  in  the  long  run.  They, 
as  well  as  our  mechanics,  for  most  farmers  are  both,  will 
have  the  best  attainable  implements  and  tools  in  spite  of 
their  first  cost;  and  what  prices  will  they  not  pay  for  the 
best  breeding  stock,  patiently  biding  their  time  for  the 
improvement  of  their  flocks  and  herds?  Looking  to  their 
interests  "in  the  long  run,"  they  rejoice  to  see  manufac- 
tories spring  up  around  them,  bringing  them  consumers, 
helping  to  pay  taxes  and  support  schools,  giving  employ- 
ment to  their  children,  increasing  the  value  of  their  land, 
and  making  them  partakers  of  a  common  prosperity.  They 
take  still  a  broader  view.  The  absolute  owners  of  the 
country,  as  Yice-President  Wheeler  has  recently  well  said, 
and,  aside  from  the  comparatively  small  area  of  the  cities 
and  villages,  the  proprietors  of  all  the  soil,  they  have  a 
stake  in  the  national  welfare,  such  as  no  other  classes  have, 
and  in  fact  concern  themselves  with  its  interests  as  no 
others  do.  They  are  our  bulwarks  against  European  com- 
munism, and  we  may  hope  against  other  no  less  dangerous 
forms  of  foreign  propagandism.  They  constitute  the  ruling 
political  majorities,  at  least  in  the  North  and  West.  Con- 
servative, yet  wisely  progressive,  controlling  the  political 
power,  as  they  have  done  by  their  votes  for  the  last  twenty 
years,  including  the  great  crisis  in  our  history,  it  is  they 
who  have  eliminated  from  our  institutions  the  last  vestige  of 
feudalism;  and  it  is  they  who  have  incorporated  into  our  legis- 


THE  FARMERS'  QUESTION.  483 

lation  the  principle  of  the  new  and  benign  gospel  of  political 
economy  which  considers  "the  laws  of  the  production  and 
distribution  of  wealth,"  not  alone,  but  in  their  relations  to 
human  welfare.  The  narrow  and  selfish  maxim  of  mere 
trade  has  no  place  in  a  -  political  economy  like  this.  How 
inappropriately,  then,  is  it  applied  to  those  who  make  it 
subordinate  in  their  private  transactions,  and  sink  it  wholly 
in  their  determination  of  public  duty,  because,  as  "the 
absolute  owners  of  the  country,"  they  are  compelled  to 
seek  in  the  development  of  the  nation  and  the  welfare  of 
all  its  people  the  first  source  of  their  own  prosperity? 

THE    FARMERS7    FIRST    OBJECT    TO    SELL    DEAR. 

It  should  be  observed,  moreover,  that  there  are  obvious 
reasons  why  farmers  disregard  the  "Golden  Rule  of  trade'7 
in  their  private  transactions.  To  the  trader  it  is  equally 
important  that  he  should  buy  cheap  and  sell  dear.  To  the 
farmer  it  is  comparatively  of  little  importance  for  him  to 
buy  general  commodities  or  manufactured  products  cheap, 
provided  he  gets  good  prices  for  his  farm  products.  Obtain- 
ing the  chief  necessaries  for  subsistence  for  his  land,  it  is 
his  happy  lot  to  be  able  to  retrench  at  will,  without  much 
inconvenience,  his  consumption  of  purchased  commodities. 
He  therefore  looks  mainly  to  the  prices  of  his  own  products. 
Their  high  prices  to  him  are  something  more  than  trading 
results, — they  are  a  source  of  personal  pride,  an  indication 
of  the  productiveness  of  his  farm,  the  assurance  of  future 
prosperity;  hence  the  good  times  in  which  farmers  rejoice 
are  not  those  when  goods  are  cheap  but  when  farm  products 
are  high.  All  that  the  Cobden  Club  pretends  seriously  to 
offer  him  in  its  system  is  cheap  goods.  In  vain  is  the  net 
set  in  sight  of  any  bird.  This  is  a  poor  lure  to  one  who  can 
see  with  half  an  eye  that  in  those  cheap  foreign  goods  is 
involved  the  loss  of  what  he  values  above  all  other  things, 
,  home  market  for  the  products  of  his  farm. 


484  THE  FARMERS'  QUESTION.' 

} 

OUR    FARMERS    SEEK    AND    RECEIVED-DIRECT    PROTECTION. 

I  will  but  glance  at  the  next^roposition  in  the  Cobden 
Club  appeal,  to  follow  them  iimtheir  order,  which  is  that 
fanners  have  no  direct  interest  in  our  protective  policy. 
The  statement  is  thus  broadly  made:  uThe  Western  farmer 
himself  neither  receives  nor  seeks  legislative  '  protection.' 
He  requires  no  State  subvention."  So  far  from  this  being 
true,  farmers  are  protected  by  what  would  be  regarded  in; 
Europe  as  high  duties  upon  all  the  important  agricultural 
products,  as  by  a  duty  of  from  ten  to  twenty  cents  per 
bushel  on  all  cereals,  twenty  per  cent,  on  animals,  etc.,  the 
duties  being  demanded,  it  is  true,  to  resist  not  European 
but  Canadian  competition.  The  vigor  with  which  our  farmers 
resist  a  reciprocity  treaty  with  Canada,  which  would  involve 
a  partial  surrender  of  these  duties,  shows  how  stubbornly 
they  insist  upon  retaining  such  protection  as  they  have. 
Upon  all  agricultural  products  in  which  the  foreign  compe- 
tition is  more  formidable,  our  protective  duties  to  agricul- 
ture attain  the  highest  range,  as  in  rice,  sugar,  and  wool, 
the  protective  duty  on  the  latter  being  higher  than  upon  any 
manufactured  product  except  those  of  silk.  I  need  not 
show  how  essential  this  protective  duty,  although  amounting 
to  from  three  to  four  millions  annually,  is  to  sustain,  against 
the  competition  of  the  half  civilized  growers  of  the  South- 
ern Hemisphere,  the  most  cherished  and  wide-spread  of  all 
our  agricultural  industries,  our  sheep  husbandry,  because 
the  pioneer  of  agriculture,  the  most  available  means  of  re- 
storing the  land  and  the  chief  source  of  cheap  animal  food. 
The  facts  that  the  wool  duties  were  imposed  at  the  demand 
of  the  West,  and  that  the  many  attempts  made  in  the  last 
ten  years  have  met  their  chief  resistance  from  the  West,  are 
sufficient  to  refute  the  assertion  that  "the  Western  farmer 
neither  receives  nor  seeks  legislation."  It  is  amusing  to 
hear  the  Cobden  Club  teachers  proclaim  to  the  Western 
farmer  the  enormity  of  the  duties  he  is  compelled  to  pay  on 


QUESTION.  485 


woolen  and  worsted  goods,  asserted  to  be  sixty -six  per  cent, 
on  the  average,  when  more  than  half  of  this  duty  is  the 
mere  equivalent  of  the  duty  upon  wool  imposed  for  the  pro- 
tection and  at  the  demand  of  the  Western  farmer  himself. 

This  theory,    as  old  as  the  first  attack  upon  our 

tariff  system,  has  been  so  often  and  so  completely  refuted 
that  nothing  but  a  contempt  for  American  intelligence 
could  have  permitted  it  to  be  revived  at  this  day.  It  is  a 
theory  so  preposterous  that  it  can  hardly  be  answered  seri- 
ously and  is  best  met  by  that  method  of  logic  which  con- 
sists in  reducing  a  proposition  to  an  absurdity.  Our  last 
British  teacher  in  political  economy  seems  to  imagine  that 
the  "  mare's  nest "  of  monstrous  figures  which  he  has  found 
is  a  new  discovery  in  the  unexplored  field  of  American 
finances.  Years  ago  American  theorists  of  the  school  of 
Calhoun,  Walker,  and  Wells,  saw  in  the  clouds  of  their  own 
fancy  similar  monsters;  but  happily  the  people  to  whom 
they  were  pointed  out  failed  to  see  their  huge  proportions 
or  to  respond  with  Polonius,  "  Very  like  a  whale!  "  Years 
ago  our  wiser  economists,  such  as  Clay,  Phillips,  and  Elder, 
showed  that  those  monsters  were  but  clouds  and  phantasms. 
The  monstrosity  of  the  tax  upon  consumers  was  the  staple 
of  the  stump-speeches  against  the  tariff  of  1842.  Mr. 
Clay,  in  his  Raleigh  speech  of  1844,  tells  us  how  the  West- 
ern farmers  pricked  the  bubble  theory  with  the  needle  fact 
in  his  day.  "My  friend,"  cried  a  Western  demagogue  from 
the  stump  to  a  farmer  in  his  audience,  udo  you  know  that 
these  tariff  monopolists  make  you  pay  six  cents  a  yard  (the 
amount  of  the  duty)  more  than  you  ought  to  pay  for  the 
shirt  on  your  back?"  "I  suppose  it  must  be  so,"  replies 
the  farmer,  "  since  you  say  it,  but  I  can't  quite  understand 
how  it  can  be,  since  I  gave  for  it  only  five  cents  and  a  half 
a  yard!  " 

Thirty  years  ago,   Judge  Phillips,  replying  to  Secretary 
Walker,  showed  that  if  the  duty  were  added  to  the  price  of 


486  THE  FARMERS'  QUESTION. 

all  articles  imported  and  produced  in  the  country  the  then 
existing  duty  upon  corn  and  other  cereals  would  inflict  a  tax 
upon  our  people,  or  a  dead  loss  by  producing  these  cereals 
ourselves  instead  of  importing  them  from  abroad,  of  $74,- 
000,000.  An  average  duty  of  twenty -one  per  cent,  upon 
$470,000,000,  the  then  estimated  amount  of  our  manufac- 
tures he  shows  upon  the  same  theory,  would  inflict  a  loss  of 
$66,000,000  through  producing  our  own  manufactures  in- 
stead of  importing  them.  He  presents  these  figures  to  show 
by  their  enormity  the  absurdity  of  the  free- trade  theory 
upon  its  very  face.  Our  British  teacher  swells  his  figures  of 
loss,  even  to  the  farmers  alone,  to  the  appalling  sum  of 
$400,000,000,  and  does  not  seem  to  suspect  that  the  very 
enormity  of  his  statement  makes  it  ridiculous. 

At  a  later  period  Dr.  Elder,  replying  to  Mr.  "Wells, — a 
believer  in  the  reflected  effect  of  duties  upon  the  prices  of 
domestic  commodities,— shows  that  in  the  year  1867-1868, 
the  average  duty  on  foreign  goods  competing  with  American 
was  a  small  fraction  less  than  forty-eight  per  cent.,  while  the 
value  of  American  products  in  that  year  was  $3,487,000,- 
000.  On  this  sum,  he  says,  according  to  the  theory  of  free 
trade,  "  A  forty-eight  per  cent,  increase  of  cost  to  consum- 
ers must  have  fallen,  and  therefore  the  duties  charged  upon 
the  foreign  import  surcharged  the  prices  of  their  domestic 
rivals  the  total  sum  of  $1,473,760,000,  or  nine'and  one-half 
times  the  amount  of  the  duties  secured  to  the  Treasury  by 
the  system  of  raising  revenue  at  the  custom  house!  "  These 
figures  are  scarcely  larger  than  those  given  by  our  British 
teacher.  There  is  the  important  difference  in  the  objects  of 
the  statements  made  by  the  two  economists.  By  one  they 
are  made  seriously  and  by  the  other  ironically,  as  if  the  bare 
statement  sufficiently  exposed  its  absurdity.  We  may  half 
suspect  that  Dr.  Elder  is  responsible  for  our  British  friend's 
delusion.  It  is  not  the  first  time  that  an  American  extrav- 
aganza has  been  taken  by  credulous  foreigners  for  sober  fact. 


THE    FARMERS     QUESTION. 


487 


The  theory  is  reduced  to  its  utmost  verge  of  absurdity  by 
a  later  statement  of  Judge  Kelley  in  his  speech  on  the  Wood 
tariff  bill  in  May,  1878,  who  gives  the  following  table  of  the 
quantities  of  certain  specified  agricultural  products  raised  in 
the  country,  the  quantities  exported  and  retained  for  home 
consumption,  the  rates  of  duty  on  each  and  the  consequent 
tax  imposed  upon  the  people  at  large  for  the  benefit  of  the 
farmers,  if  it  be  true  that  duties  are  added  to  the  prices  not 
only  of  imported  articles  but  those  of  domestic  production. 


Amount  of  tax 

imposed  on  the 

consumers     in 

Products. 

Number  of 
bushels 
raised 
in  1877. 

Number  of 
bushels 
exported. 

Balance 
for  home 
consumption. 

Duty 
per 
bushel. 

the    United 
States,     calcu- 
lated in  accord- 
ance with  the 
free     trade 

dogma  that  the 

duty  is  added 

to  the  price. 

Wheat,   .  .  . 

360,000,000 

57,043,936 

302,956,064 

$0.20 

$60,591,212.80 

Barley,    .  .  . 

35,600,000 

1,186,129 

34,413,871 

.15 

5,162,080.65 

Potatoes,  .  . 

146,000,000 

529,650 

145,470,350 

.15 

21,820,552.50 

1,340,000,000 

73,100,518 

1,266,899,482 

.10 

125,689  948  20 

Oats,    .... 

405,000,000 

2,854,128 

409,145,872 

.10 

40,214,587.20 

Rye 

22  100  000 

2,227  000 

19  873  000 

10 

1  987  300  00 

Total,  .  .  . 

2,308,700,000 

136,941,361 

2,171,758,639 

$256,465,681.35 

Applying  a  similar  calculation  to  other  agricultural  pro- 
ductions,— hay,  vegetables,  animals,  wool,  etc., — the  theory 
would  make  the  tax  imposed  for  the  benefit  of  farmers  not 
less  than  five  hundred  million  dollars.  This  is  precisely  as 
true,  because  established  by  the  same  reasoning,  as  that  four 
hundred  million  dollars  are  "  wrung  from  "  the  farmer  "  to 
support  unprofitable  manufactures  in  the  Eastern  States." 


488  THE  FARMERS'  QUESTION. 

THE  FOREIGNER  PAYS  THE  DUTY. 

If  it  were  necessary  to  seriously  combat  the  position  that 
a  duty  upon  such  articles  as  are  produced  in  the  country  is 
a  tax  upon  the  consumer  to  the  extent  of  the  duty,  I  might 
show  that  the  duty  is  wholly,  or  in  a  great  part,  paid  by  the 
foreign  importer,  by  a  diminution  of  his  profits,  or  what  is 
more  generally  the  case,  a  reduction  of  wages  and  the  cost 
of  raw  materials,  which  enter  into  his  products.  The  very 
earnestness  with  which  foreigners  oppose  our  duties  shows 
that  the  duties  are  obnoxious,  because  they  are  heavy  draw- 
backs upon  their  own  profits.  British  manufacturers,  in 
addressing  us,  tell  us  that  our  people  pay  all  the  duty.  Ii\ 
consulting  among  themselves,  in  their  chambers  of  com- 
merce at  Bradford  and  Manchester,  they  invariably  complain 
of  the  tax  which  they  have  to  pay  for  the  admission  of 
their  goods  into  foreign  countries.  The  orators  in  Canada, 
clamoring  for  a  reciprocity  treaty,  constantly  declare  that 
Canadians  have  to  pay  the  whole  of  the  duty  on  the  coal, 
barley,  and  wool  imported  into  the  States;  and  our  experi- 
ence under  the  Reciprocity  Treaty,  when  for  a  time  these 
articles  were  free,  proved  conclusively  that  the  remission  of 
the  duty  which  our  Government  lost  inured  to  the  benefit, 
not  of  the  American  consumer,  but  the  foreign  producer, — 
the  prices  in  our  markets  being  no  dearer  with  the  duty 
than  when  these  articles  were  free. 

GOODS    CHEAPENED    BY    PROTECTION. 

If  it  were  material  for  the  point  I  have  in  view  to  show 
the  intrinsic  or  practical  cheapness  of  manufactured  com- 
modities to  our  farmers,  in  consequence  of  our  home  manu- 
factures under  the  protective  system,  I  might  show  that 
the  invariable  effect  of  the  introduction,  through  protective 
duties,  of  a  domestic  fabric,  has  been  the  immediate  reduc- 
tion of  the  price  of  the  foreign  competing  article,  and  a 
continually  increasing  reduction,  through  domestic  competi- 


THE  FARMERS'  QUESTION.  489 

tion,  in  fact  bringing  them  to  the  level  of  cost  required  by 
wages  of  labor  and  profits  of  capital  in  all  the  branches  of 
business  in  the  country.  Cottons,  woolens,  in  their  infinite 
variety,  hardware,  steel,  cast  and  Bessemer,  glass,  nails, 
screws,  and  machinery  are  palpable  proofs  of  this  proposi- 
tion. Every  farmer  past  middle  age  can  recall  from  his 
own  experience  the  multitudinous  articles  which  have  been 
cheapened  and  improved  by  our  protected  manufactures. 

FOREIGN    GOODS    CHEAP    ONLY    WHEN    NOT    IN    DEMAND. 

If  it  were  necessary  to  dwell  upon  the  question  of  cheap- 
ness, I  might  show  that  the  cheapness  of  foreign  commodi- 
ties ceases  the  moment  there  is  a  demand  for  them, — as 
English  rails  rose  from  fifty  up  to  eighty  dollars  a  ton  when 
the  tariff  of  1846  closed  our  own  furnaces  and  rolling  mills, 
and  as,  in  the  last  year,  English  combing  wools,  in  England, 
rose  from  ten  pence  to  eighteen  pence  per  pound  when  the 
exceptional  demand  of  fifteen  million  pounds  of  these  wools 
was  made  upon  England  from  this  country.  A  temporary 
cheapness,  to  be  followed  by  excessive  dearness,  or  a  tinter- 
board  movement  of  prices,  is  no  benefit  to  consumers.  It 
is  too  obvious  to  need  argument  that  our  consumers  will 
best  secure  equable  or  gradually  falling  -  prices  by  a  system 
which,  while  not  prohibiting  importation,  preserves  domestic 
competition  in  full  activity. 

HIGH    WAGES   BENEFIT    FARMERS. 

I  do  not  commend  our  national  protective  system  to 
American  farmers  because  it  produces  manufactured  goods 
as  cheaply  as  they  can  be  made  in  Europe.  As  I  have  said 
before,  the  nominal  cheapness  of  these  commodities  is,  to 
the  farmer  especially,  of  little  importance,  in  comparison 
with  other  considerations.  I  freely  admit  that  manufactured 
commodities  cannot  be  produced  in  this  country  as  cheaply 
as  in  Europe,  for  the  simple  reason  that,  while  wages  of 
21* 


490  THE  FARMERS'  QUESTION. 

labor  constitute  from  one-fourth  to  three-fourths  the  cost  of 
nearly  all  manufactures,  we  pay,  and  from  the  nature  of  our 
institutions  must  continue  to  pay,  for  a  day's  labor  from  two 
to  four  times  as  much  as  is  paid  in  Europe.  But  let  the 
farmers  remember  that  it  is  these  higher  wages,  although 
making  manufactured  products  nominally  dearer,  which 
create  for  them  the  greater  part  of  the  consumers  of  farm 
products, — the  mechanics,  artisans,  and  manufacturing  ope- 
ratives of  the  country,  with  their  dependents,  diverting 
them  also  from  labor  on  the  land,  and  converting  them  from 
competitors  into  consumers.  It  is  the  higher  wages  which 
enable  these  consumers  to  pay  liberal  prices  for  the  agricul- 
tural products  which  constitute  at  least  three-fifths  of  their 
expenditure.  It  is  these  higher  wages  which  enable  the 
farmer,  in  his  turn,  through  the  better  prices  received  for 
his  products,  to  obtain  the  commodities  manufactured  by 
these  consumers  at  little  cost  of  transportation,  and  to  obtain 
them  more  abundantly  and  practically  more  cheaply  than 
they  could  possibly  be  obtained  from  distant  countries;  for 
to  the  farmer  those  commodities  are  the  cheapest  the  greatest 
quantity  of  which  are  procurable  for  the  product  of  a  given 
number  of  days'  labor  on  his  land.  The  intelligent  farmer 
can  readily  see  that  he,  of  all  men,  would  be  least  benefited 
by  the  cheap  foreign  manufactured  products  with  which 
free  trade  would  tempt  him ;  he  must  see  that  they  mean 
nothing  else  than  one  of  two  things, — a  total  abandonment 
of  manufactures  in  this  country — the  real  object  of  the 
Cobden  Club — and  a  total  loss  of  the  chief  part  of  his  cus- 
tomers; or  a  lowering  to  European  rates, — a  reduction,  of 
at  least  one  half,  of  all  the  wages  of  labor  in  our  mechanical 
and  manufacturing  industries,  with  a  diminution  to  the  same 
extent  of  the  ability  of  the  workers  in  these  industries,  to 
purchase  the  products  of  the  farm.  Three-fifths,  at  least, 
of  the  higher  wages  of  manufacturing  labor,  created  and 
sustained  by  our  protective  system,  go  into  the  pockets  of 


THE  FARMERS'  QUESTION.  491 

the  farmers;  and  every  ton  of  iron  and  every  yard  of  cloth 
produced  in  this  country  represents  to  that  extent  the  pro- 
ducts of  American  farms. 

HOW    GOODS    FALL    AND    LAND    RISES. 

Let  me  conclude  this  branch  of  my  subject — the  illusion 
of  cheap  foreign  commodities — by  recalling  a  law  in  social 
science,  first  announced  and  demonstrated  by  the  most  illus- 
trious economist  of  the  present  century,  the  late  Mr.  Carey, 
whose  authority,  I  trust,  will  be  sufficient  for  its  acceptance 
without  the  illustrations  which  might  be  given.  It  is  this: 
In  countries  in  which  society  advances  with  perfect  freedom 
for  development,  as  in  those  defended  by  protective  laws 
from  foreign  interference,  it  is  the  fixed  law  that  the  cost  of 
manufactured  commodities  tends  constantly  to  decrease,  and 
the  value  of  land,  and  the  costs  of  the  products  of  the  land, 
to  increase.  Thus,  under  the  protective  system,  the  farmers 
of  this  country,  not  through  the  selfish  methods  of  the 
trader,  but  consistently  with  the  welfare  of  the  whole  com- 
munity,  may  attain  the  ultimatum  of  free  trade,  in  buying 
commodities  cheap  and  selling  land  and  land-products  dear. 

WESTERN    MANUFACTURING    INTEREST 

I  need  not  tell  Western  men  how  enormously  manufac- 
tures of  every  form  pursued  at  the  East  are  developed,  and 
with  what  wonderful  vigor  and  rapidity  they  are  advancing, 
in  their  States.  We,  of  the  East,  know  it  well  enough,  and 
I  might  say,  to  our  cost,  if  Western  competition  had  not 
compelled  us,  in  Mr.  Webster's  phrase,  to  find  "  room  higher 
up."  Ohio  is  declared  to  be  the  third  manufacturing  State  in 
tho  Union.  Chicago  threatens  to  rival  Philadelphia.  With- 
out specifying  other  industries,  the  West  makes  substantially 
all  her  agricultural  machinery,  and,  with  the  exception  of 
some  fabrics  of  cotton  and  silk,  clothes  what  would  be  equal 
to  her  whole  agricultural  population.  I  have  personally  col 


492  THE  FARMERS'  QUESTION. 

lected  from  the  official  returns  of  the  census,  now  in  pro- 
gress, the  following  comparative  tables: — 

NUMBER    OF    WOOLEN    MILLS    IN   EASTERN    STATES. 

Maine,  ......         64 

New  Hampshire,          .  .  .  .  .96 

Vermont,         ......         52 

Massachusetts,  .  .  .  .  .329 

Rhode  Island,  .....         94 

Connecticut,  .  .  .  „  .159 


794 

NUMBER    OF   WOOLEN  MILLS    IN   WESTERN   STATES. 

Ohio,    .......       208 

Indiana,            .             .  .             .             .             .107 

Illinois,             o             .  .             .             .                       78 

Missouri,          .             .  .             .             „                      71 

Wisconsin,       .             .  .             .             0                      61 

Iowa,  65 

Minnesota,        »             .  .             9             0             .11 

Colorado,  1 

Utah,                .             .  .                                                  10 

Washington  Territory,  ....           1 

Michigan,         .             .  .             .             .    *         .         43 

California,        .             .  ,             .             .             .12 


668 

By  these  tables  it  will  be  seen  how  rapidly  the  West  is 
trenching  upon  the  East.  I  do  not  pretend  that  the  Western 
mills  equal  in  capacity  those  of  New  England,  nor  that  they 
produce  certain  classes  of  fabrics,  such  as  dress  goods  and 
carpets,  which  can  be  more  advantageously  made  in  larger 
establishments.  But  each  one  of  these  mills  is  the  nucleus 
for  a  broader  extension.  Many  a  Western  two  set  mill  of  ten 
years  ago  has  already  quadrupled  its  capacity.  These  small 


THE  FARMERS'  QUESTION.  493 

mills  of  the  West  are  what  the  germs  of  most  of  the  large 
factories  of  the  East  were  forty  or  fifty  years  ago,  while  the 
greater  part  of  the  Western  mills  enumerated  have  grown 
up  within  only  thirteen  years  under  the  fostering  influence 
of  the  tariff  of  1867.  It  has  been  observed  that  the  woolen 
mill  is  everywhere  the  pioneer  of  other  manufactures.  The 
erection\of  a  woolen  mill  of  one  or  two  sets  in  a  new  State, 
which  seems  to  people  of  the  older  States  a  trifling  affair,  is 
in  fact  an  epoch, — the  dawn  of  manufactures, — which  all 
experience  tells  us  will  expand  into  a  widely-diversified  in- 
dustry, with  its  sure  accompaniment,  a  prosperous  and  im- 
proving agriculture.  The  table  above  given  does  not  merely 
show  what  the  West  has  now,  but  what  she  is  sure  to  have 
within  the  lifetime  of  even  middle-aged  men, — an  industry 
capable  in  itself  of  supplying  all  the  necessary  commodities, 
and  most  of  the  luxuries,  required  by  its  people. 

ILLUSTRATION    OF    HOME    MARKET. 

We  do  not  have  to  go  far  for  an  illustration  of  the  advan- 
tages of  a  home  market.  All  the  Western  States  above 
enumerated  are  eminently  wool-producing  States.  Take 
Ohio,  with  its  two  hundred  and  eight  woolen  mills,  distri. 
buted  in  all  .parts  of  the  State,  and  its  four  million  sheep. 
The  raw  material,  wool,  composes  a  little  more  than  one  half 
the  cost  of  the  cloth  made  in  these  mills.  The  whole  of  this 
cost  is  paid  to  the  farmer  by  the  mill  almost  at  his  door. 
One-quarter,  at  least,  of  the  remaining  cost  of  the  cloth  con- 
sists of  the  wages  of  labor,  and  of  this,  as  I  have  before 
said,  the  farmer  gets  at  least  three-fifths.  Of  the  last  remain- 
ing quarter,  comprising  some  cost  of  raw  material,  profits, 
etc.,  the  greater  part  is  usually  expended  for  improvements, 
making  a  still  further  expenditure  for  labor  and  the  con- 
sumption of  farm  products.  Much  the  largest  part  of  the 
cost  goes  to  the  farmer.  He  in  his  turn  wants  cloth  for  him- 
self and  his  family.  He  gets  it  by  mere  exchange  at  the  low- 


4l>4  THE  FARMERS'  QUESTION. 


est  price  at  which  it  can  be  made  with  a  fair  profit,  because 
of  the  competition  of  the  other  two  hundred  and  eight  mills, 
and  through  the  same  competition  obtains  the  highest  market- 
price  for  his  wool. 

I  have  before  me  an  advertisement  of  one  of  these  Ohio 
mills  with  this  notice:  u  The  highest  market-price  paid  for 
wool  in  goods.  All  goods  warranted  free  from  shoddy  and 
cotton."  Here  is  an  exchange  made  to  the  utmost  possible 
advantage  of  both  sides.  There  is  no  loss  in  transportation, 
no  loss  through  middle-men,  no  possible  loss  by  fraud  on 
either  side;  for  both  purchasers  know  each  other,  and  are 
permanently  accountable  one  to  the  other.  All  the  devices  of 
trade  known  since  the  time  of  the  Phoenicians  could  not  con- 
trive to  make  the  farmer's  cloth  so  cheap,  or  his  wool  so  dear, 
as  by  the  simple  exchange  I  have  described.  This  is  what  I 
mean  by  a  home  market,  and  this  is  what  the  Cobden  Club 
advises  the  Ohio  farmers  to  abandon.  Although  all  ex- 
changes  in  the  home  market  are  not  so  simple  as  the  above, 
they  all  involve  the  same  great  principle,  which  is  the  first 
aim  of  a  protective  policy.  Protection  would  bring,  through 
a  home  market,  the  producer  and  consumer  as  nearly  as  pos- 
sible together,  saving  the  cost  of  transportation  and  losses 
through  middle-men.  Free  trade,  on  the"contrary,  aims  to 
separate  the  producer  and  consumer  as  widely  as  possible, 
and  to  saddle  both  with  the  cost  of  transportation  and  com- 
missions for  the  benefit  of  the  trader  and  non-producer. 

WITH  A  HOME  MARKET  ALL  THE  PRODUCTS  OF  THE  FARM 
SALABLE. 

It  may  be  said  that  wool, — and  the  same  applies  to  wheat 
— being  an  easy  transportable  article,  and  of  high  value,  tho 
cost  of  transportation  being  added  to  the  price,  it  will  realize 
as  much  in  the  distant  as  the  home  market.  But  wool  and 
wheat  are  only  two  of  the  products  of  the  farm.  It  is  the 
first  principle  in  agriculture  that  a  mixed  husbandry  is  the 


THE  FARMERS'  QUESTION.  495 

most  profitable.  There  is  not  only  more  profit,  but  there 
never  can  be  ruin  by  the  total  loss  of  the  farm  crop.  The 
most  profitable  crops  are  those  which  are  not  transportable, 
at  least  to  distant  countries,  such  as  fruits,  garden  vegetables, 
etc.  "When  the  farmer  can  exchange  the  whole  of  the  pro- 
ducts which  his  land  can  be  made  to  yield,  at  rates  corres- 
ponding with  the  general  price  of  labor,  his  farm  will  be 
worth  four  times  as  much  as  it  would  be  when  only  wheat 
and  other  cereals  can  be  sold.  This  he  can  do  when  the  pro- 
tective policy  plants  the  village  of  mechanics,  artisans,  and 
factory  operatives  in  his  neighborhood.  Hence  it  is  that 
land  in  the  vicinity  of  a  manufacturing  population  is  worth, 
for  agricultural  purposes  alone,  from  $100  to  $200  an  acre; 
while  without  these  advantages,  it  is  rarely  worth,  in  this 
country,  $40  an  acre. 

The  State  of  Massachusetts — perhaps  the  best  type  of  a 
manufacturing  State — well  illustrates  how  manufactures  may 
be  conducive  to  a  prosperous  agriculture,  even  upon  poor 
granitic  soils.  In  this  State,  according  to  the  State  census 
of  1875,  the  average  value  of  each  of  the  44,549  farms  is 
$4,100.  In  the  leading  manufacturing  county, — Middlesex, 
— the  average  value  of  the  116,134^  acres  of  cultivated  land 
outside  the  cities,  is  $98.05.  The  average  value  of  3,988f 
acres  of  market  gardens  is  $283  per  acre.  The  total  value 
of  the  agricultural  products  of  Massachusetts,  in  round 
numbers,  is  forty  millions  of  dollars.  Of  this  amount  the 
cereals  and  the  wool,  the  easily  transportable  products,  yield 
only  $1,724,346;  over  thirty-eight  millions  of  miscellaneous 
farm  products  not  so  transportable  being  consumed  at  home, 
principally  by  the  manufacturing  population.  The  latter 
fact  shows  how  a  manufacturing  State  ceases  to  be  a  rival  of 
the  West  in  the  production  of  cereals,  which  at  present  can 
be  more  advantageously  grown  there,  while  each  one  of  its 
1,651,912  people  consumes  yearly  at  least  one  barrel  of 
Western  flour. 


496  THE  FARMERS'  QUESTION. 

THE    FOKEIGN    MARKET    UNRELIABLE    AND    INADEQUATE. 

The  Cobden  Club  essay  says,  "The  very  essence  of  the 
American  farmers'  prosperity  depends  upon  their  having 
large  and  increasing  outlets  abroad  for  the  large  and  increas 
ing  amount  of  their  produce."  The  writer  of  the  essay, 
unsuspectingly,  in  another  connection,  gives  a  conclusive 
reason  why  it  is  not  for  the  farmer's  interest  to  seek  for  his 
market  abroad.  He  says,  4<  The  more  freight  the  Western 
farmer  has  to  pay  to  get  his  produce  delivered  in  European 
markets,  the  smaller  the  net  residue  that  comes  to  him,  for 
the  European  buyer's  prices  include  freight."  It  is  thus 
admitted  that  the  farmer  who  sells  his  wheat  in  England  has 
first  to  pay  the  cost  of  getting  it  there.  He  then  and  there 
finds  grain  competing  with  his  own  for  sale,  which  was 
raised  around  the  Baltic  or  Black  Sea  by  cultivators  who 
have  but  a  tithe  of  his  burdens  to  carry,  whose  product 
reaches  market  at  a  less  cost  of  transportation,  and  which, 
accordingly,  in  average  seasons,  can  be  sold  at  a  lower  price 
than  his  can  be  afforded  at.  The  exceptional  European 
demand  for  American  wheat  for  the  last  three  or  four  years, 
I  need  not  say,  is  due  purely  to  the  failure  of  European  har- 
vests within  that  period.  There  have  been  four  years  of 
failing  harvests  in  England,  and  in  the  last  year  an  unprece- 
dented falling  .off  of  the  crop  in  France, — ordinarily  an 
enormous  producer  of  wheat.  It  cannot  be  doubted  that  a 
return  of  good  harvests  in  the  grain  countries  of  Europe 
Would  arrest,  or  greatly  diminish,  American  importations. 
Even  the  Cobden  Club  essay  admits  that  they  would  be 
stopped  by  "  average  harvests  in  Europe."  It  is  true  that 
last  year  the  exportation  of  our  wheat  reached  the  extraordi- 
nary proportion  of  24.76  per  cent,  of  our  total  production. 
But  can  the  wheat-grower,  who  must  provide  for  his  crop  a 
year  before  he  sells,  rely  upon  a  permanent  demand  like  this  ? 
Besides,  constant  fluctuations  in  price  and  constant  distur- 
bances in  the  home  market  are  the  penalties  which  our  wheat- 


THE  FARMERS'  QUESTION.  497 

growers  must  pay  for  producing  for  foreign  countries.  I 
might  fill  my  pages  with  figures  illustrating  these  fluctu- 
ations, but  they  would  only  confuse  the  reader.  I  can  make 
my  point  clearer  by  quoting  the  statements  of  our  most 
eminent  agricultural  statistician,  Mr.  Dodge,  recently  made  in 
a  government  report.  Speaking  of  our  wheat  exportation,  he 


"  The  proportion  of  exportation  is  so  large  and  the  range 
of  its  fluctuation  so  great,  that  serious  disturbance  in  the 
market  often  results.  It  not  unfrequently  occurs  that  a 
moderate  yield  is  accompanied  by  low  prices,  and  a  large 
crop  is  marketed  at  high  rates.  There  is  no  doubt  that  the 
wheat-farmer  is  at  the  mercy  of  the  foreign  demand.  Tf 
British  fields  are  blighted,  there  is  rejoicing  on  our  prairies 
over  remunerative  harvests.  If  the  garners  of  continental 
Europe  are  full,  and  England's  wants  at  a  minimum,  there 
is  dissatisfaction  at  the  West,  liable  to  be  vented  on  the  cur- 
rency, the  tariff,  or  the  railroads.  .  .  .  While  subject  to 
greater  fluctuations  than  other  crops,  from  the  vicissitudes 
of  the  seasons  and  depredations  of  insects,  the  quantity 
required  annually  for  exportation  is  still  more  variable  than 
the  amount  of  the  crop;  the  heaviest  foreign  demand  may 
occur  in  a  season  of  low  production,  and  the  lightest  in  a 
year  of  abundance,  increasing  the  fluctuation.  .  .  .  The 
wheat-grower  is  at  one  time  elated  with  remunerative  prices, 
and  at  another,  depressed  by  rates  which  fail  to  pay  the  cost 
of  production." 

Such  are  the  blessings  of  producing  for  a  foreign  market! 
Is  it  true,  then,  that  in  such  a  market,  as  free-trade  essayists 
assert,  with  all  its  caprices,  fluctuations,  and  uncertainties,  is 
to  be  found  "the  very  essence  of  the  American  farmer's 
prosperity  ?  " 

Happily  our  own  home  market,  imperfectly  developed  as 
it  still  is  at  the  West,  yet  remains  as  the  main  reliance  of  the 
Western  grain-farmer.  Of  the  peculiarly  national  product 


498  THE  FARMERS'  QUESTION. 

of  our  semi-tropical  summer  climate,  our  Indian-corn  crop, 
amounting  to  1,342,558,000  bushels,  only  87,192,110  bushels 
or  6.49  percent,  are  exported,  93.51  per  cent,  being  consumed 
at  home.  Every  sensible  farmer  must  admit  that  an  increased 
exportation  of  corn  is  by  no  means  desirable,  as  there  is 
usually  more  profit  in  the  sale  of  meat,  wool,  and  other 
products  of  corn.  He  must  admit,  too,  that  the  loss  of  soil 
fertility  and  the  cost  of  transportation,  often  far  greater  than 
the  original  value  of  the  grain,  will  ultimately  bring  both  him 
and  his  farm  to  poverty,  while  the  corn  being  consumed  at 
home,  the  soil  elements  are  preserved,  and  the  meat  and  wool, 
into  which  it  is  converted,  have  a  value  which  bears  trans- 
portation. Of  our  total  grain  crop,  even  with  the  unprece- 
dented exportation  of  nearly  250,000,000*  bushels  of  wheat, 
we  still  retain  and  use  eight-ninths  of  the  total  volume  of 
production.  What  proof  more  conclusive  than  these  simple 
facts  can  the  farmer  demand  of  the  immeasurable  superiority 
of  the  home  market  over  that  promised,  but  by  no  means 
assured,  by  the  advocates  of  "  outlets  abroad  for  American 
produce  ?  " 

HOW    TO    EAISE    PRICES    OF    FARM    EXPORTS. 

I  would  by  no  means  deny  broadly  the  value  of  a  foreign 
market  for  our  farmers'  surplus  products;  but  I  would  have 
the  exports,  instead  of  being  simply  raw  products  of  costly 
transportation,  those  whigh  embody  to  the  utmost  possible 
degree  American  labor, — in  short,  the  manufactured  products 
of  the  farm,  such  as  cheese,  butter,  flour,  maizena,  bacon,  or 
other  "hog  products;"  and  I  would  have  those  articles 
exported  at  prices  fixed  by  the  competition  of  an  active  home 
market,  which  can  only  exist  where  all  industry  is  astir.  I 
have  before  me  a  market  report  of  a  month  or  two  ago,  in 
one  of  our  city  papers,  which  shows  exactly  how  foreign 


*  The  figures  under  this  head  are  derived  from  Mr.  Dodge, 


THE  FARMERS'  QUESTION.  499 

prices  are  governed  by  the  activity  of  our  own  industries. 
It  is  as  follows: — 

"The  market  for  hog  products  continues  excited,  with  a 
demand  ahead  of  the  supply,  and  prices  materially  advanced 
yesterday  both  at  home  and  abroad.  Liverpool  quotations, 
following  the  lead  of  Chicago,  have  been  marked  up  nearly 
every  day  for  the  past  week.  .  .  .  Early  in  the  season 
dealers  on  the  other  side  continued  to  hold  off  for  lower 
prices  until  the  English  markets  were  very  bare  of  supplies. 
They  did  not  count  upon  the  enormous  and  steadily-increasing 
consumption  of  this  country,  brought  about  by  the  business 
revival  and  generally-improved  condition  of  our  industries. 
But  while  European  buyers  were  holding  back,  prices  have 
continued  to  advance  here,  until,  compelled  by  their  necessi- 
ties, they  are  now  coming  in  for  supplies,  arid  readily  pay 
prices  25  per  cent,  higher  than  they  could  have  bought  for 
here  two  or  three  months  ago." 

This  plain  business  statement  well  illustrates  how  a  profit- 
able export  is  best  advanced  by  the  profitable  employment  of 
our  domestic  industries. 

EXPORTS  NOT  DEPENDENT  UPON  IMPORTS. 

The  Cobden  Club  essayist  maintains  that  if  our  farmers  do 
not  take  the  manufactures  of  foreigners  they  will  not  buy  his 
produce.  He  says,  "  How  are  the  farmers  to  export  if  the 
manufacturers  will  not  allow  imports  ?  "  The  proposition 
that  if  a  nation  will  not  import  it  cannot  export  is  another 
of  the  pure  assumptions  of  free  trade  which  is  utterly  at 
Variance  with  established  facts.  Some  of  the  facts  contra- 
dicting this  assumption  are  well  stated  by  the  able  editor* 
of  a  leading  protective  journal,  in  a  reply  to  Mr.  Mongredien's 
book  on  Free  Trade  and  English  Commerce. 

"The  United  States  is  a  large  purchaser  of  Brazilian 
coffee  and  Chinese  tea,  but  neither  Brazil  nor  China  buys 

*Mr.  J.  M.  Swank  of  Philadelphia. 


500  THE  FARMERS'  QUESTION. 

from  us  one-half  the  value  of  our  purchases  from  it.  We 
buy  from  Cuba  large  quantities  of  sugar,  and  the  balance  of 
trade  between  the  two  countries  is  many  millions  every  year 
in  favor  of  Cuba.  Great  Britain  herself  has  bought  bread- 
stuffs  and  provisions  from  this  country  in  the  last  four  years 
in  unusually  large  quantities,  and  during  the  first  three  years 
of  this  period  our  purchases  of  her  products  were  much  less 
than  they  had  previously  been.  She  fell  greatly  in  our  debt 
and  had  to  pay  us  hundreds  of  millions  in  gold  or  in  our 
bonds  which  she  returned  to  us.  l  If  you  want  to  export 
much  you  must  import  much,'  says  Mr.  Mongredien.  This 
is  not  true  to-day,  as  we  have  shown,  and  it  never  was  true 
in  a  general  sense.  One  leading  function  of  gold  and  silver 
is  to  equalize  the  balances  of  trade  which  are  constantly 
requiring  the  attention  of  commercial  nations.  England 
buys  our  wheat  because  she  must  have  it  or  starve,  and  we 
buy  the  coffee  of  Brazil,  the  tea  of  China,  and  the  sugar  of 
Cuba  because  these  articles  are  necessary  to  our  comfort. 
England  does  not  hesitate  to  buy  our  wheat  because  we  have 
until  recently  refused  to  buy  her  iron,  nor  do  we  stop  to 
dicker  with  Brazil  and  China  and  Cuba  concerning  the  quan- 
tity of  our  products  they  shall  buy  from  us." 

I  might  add  that  in  1878  France  took  our  exports  to  the 
value  of  over  487  million  francs  (according  to  French  statis- 
tics), while  we  imported  in  that  year  a  value  of  but  a  little 
over  207  million  francs.  For  a  term  of  ten  years  previously 
our  imports  exceeded  our  exports  fifty-three  million  francs 
annually,  thus  proving  that  exports  had  no  relation  to 
imports. 

This  assumption  of  free  trade  is  devised  to  show  that  pro- 
tective duties  check  commerce.  I  barely  remark,  for  this  is 
not  the  place  for  a  full  illustration,  that  it  can  be  demon- 
strated that,  so  far  from  commerce  being  checked  by  protec- 
tion, the  periods  of  our  largest  general  importations  precisely 
correspond  with  those  of  our  most  protective  tariffs ;  the  fact 


THE  FARMERS'  QUESTION.  501 

being  that  the  prosperity  induced  by  protection  increases  the 
purchasing  power  of  the  people,  enabling  them  to  import,  not 
only  the  raw  materials  for  manufacture,  but  the  peculiar 
commodities  of  other  countries  not  produced  at  home.* 

DEPKECIATION    OF   AMEKICAN    SKILL. 

Although  I  have  now  considered  all  the  arguments  of  the 
essay  under  review,  directly  applicable  to  the  farmers'  ques- 
tion, I  cannot  overlook  the  imputation  upon  our  national 
capacity,  by  no  means  unequivocally  made,  in  the  declaration 
that  the  manufactured  products  of  this  country  are  dearer 
than  those  abroad  on  account  of  the  comparative  inexpert- 
ness  of  American  manufacturers,  who  are  said  to  be  taken 
from  what  they  "can  do  well,"  viz.,  to  dig  and  to  hoe,  and 
are,  by  means  of  protection,  "set  to  do  only  what  they  can 
do  badly,"  viz.,  to  spin  and  to  weave.  I  have  before  me  the 
published  statement  of  the  highest  German  authority  in  the 
textile  arts  to  an  American  correspondent,  in  these  words: 
"  The  greatest  part  of  your  own  invented  machinery  is  supe- 
rior to  the  English,  German,  or  French  machinery,  especially 
your  looms  for  finer  work,  your  looms  for  cotton  goods,  cas- 
simeres,  carpets,  and  heavy  work."  When  it  is  considered 
that  perfected  machinery  is  the  recognized  test  of  manufac- 
turing excellence,  we  may  regard  the  British  depreciation  as 
sufficiently  refuted  by  this  impartial  tribute  to  American 
skill,  and  may  be  permitted  to  omit  the  enumeration  of  the 
hundreds  of  instances  which  might  be  cited  of  American 
inventions  which  have  contributed  to  the  boasted  cheapness 
and  excellence  of  the  goods  turned  out  by  British  mills. 

*  The  above  article  is  highly  commended  to  the  farmers  of  America  by  Hon, 
Henry  L.  Dawes  and  Hon.  George  F.  Hoar. 


CHAPTER  XXXV. 

THE   INTERESTS   OF   THE   FARMER   INDEFI- 
NITELY  POSTPONED. 

BY   PROF.  JOHN   BASCOM, 
President  of  Wisconsin  State  University. 


"TjlARMERS  may  well  claim,  and  claim  with  more  empha- 
JD  sis  than  any  other  class,  that  protective  duties  should 
be  rapidly  and  finally  removed.  Farmers  are  one.haH  the 
community;  the  direct  benefits  of  protection  lie  almost 
wholly  with  the  other  half. 

It  follows,  then,  that  the  burdens  of  protection  fall  chiefly 
on  farmers. 

The  one  grand  promise  of  the  theory  of  protection,  that 
with  which  it  fills  the  mouths  of  its  friends,  and  assails  the 
ears  of  its  enemies,  that  on  which  all  its  justness  as  a  theory 
turns  is,  that  if  the  burdens  of  protection  are  quietly  borne 
for  a  limited  period,  they  will,  at  its  expiration,  be  with- 
drawn, and  will  be  replaced  by  free  trade,  diversified  indus- 
try, and  general  prosperity. 

The  success  of  protection  must  be  found  in  its  fulfillment 
of  this  promise.  I  am  not  disposed  to  deny  that  the  prom- 
ise may  be  made  in  good  faith,  and,  under  favorable  circum- 
stances,  if  fulfilled  in  good  faith,  may  be  followed,  at  least 
in  part,  by  the  results  indicated. 

This  portion  of  the  problem  it  is  no  longer  necessary  for 
us  to  consider.  We  have  accepted  the  theory;  liberal  pro- 
tection has  been  granted  for  many  years  to  many  industries. 

(502) 


INTERESTS  OF  THE  FARMER  POSTPONED.      503 

We  are  a  great  productive  people, — hardly  any  greater. 
Personal  energy  and  natural  advantages  have  wrought 
marvels  in  our  behalf.  Capital  has  accumulated  with  us  in 
large  amounts,  even  when  we  compare  ourselves  with  the 
nations  of  the  Old  World. 

Our  material  resources  are  unbounded.  Skill  has  been 
acquired  and  enterprise  called  out.  The  various  industries 
sustain  each  other  through  the  entire  circle  of  production. 
Our  home  labor  has  guaranteed  to  it  forever  the  natural 
protection  of  a  broad  ocean. 

Now,  having  borne  protective  duties  for  a  long  period, 
has  not  the  time  come  in  which  that  early  and  ever  renewed 
promise  should  be  fulfilled? 

More  than  one  generation  has  passed  away  while  the  hope 
of  cheap  goods  has  been  deferred;  how  many  are  to  follow 
in  its  steps  still  waiting  on  these  renewed  assurances  to  be 
met  somewhere  in  the  future  ? 

Is  all  time  to  be  given  to  this  theory  to  evolve  itself  in? 
We  may  well  insist  that  the  place  and,  date  of  settlement 
should  now  be  named ;  that  we  should  no  longer  be  put  off 
with  the  gains  of  our  own  labor  and  the  incidents  of  our 
own  civilization  as  if  they  were  the  returns  of  this  special 
theory.  It  looks  as  if  there  were  profound  justness  in  the 
objection  to  protection,  that  its  promises  are  not  to  be 
trusted,  that  it  adds  reason  to  reason  for  indefinite  postpone- 
ment, that  its  resources  of  excuse  and  apology  are  inexhaus- 
tible, that  it  has  never  been  known  to  say  enough.  We 
have  to  deal  with  the  horseleech's  daughters,  crying,  — 
Give !  give  ! 


CHAPTER   XXXVI. 

THE   GROUND   OF   PROTECTION  CHANGED. 
BY   HORACE  WHITE. 


RAW    MATERIALS. 

IE  curious  disputation  which  has  taken  place  in  the 
Committee  of  "Ways  and  Means  lately,  and  which  is 
not  yet  ended,  discloses  one  fact  with  remarkable  clearness 
—  that  the  grounds  upon  which  protection  is  defended  and 
supported  are  no  longer  what  they  formerly  were,  but  have 
been  radically  and  wholly  changed.  In  the  time  when  Henry 
Clay  was  the  champion  of  what  he  called  the  "  American 
system,"  and  at  the  earlier  time  when  Hamilton  favored 
some  slight  advantages  in  the  tariff  for  the  benefit  of  home 
manufactures,  the  reason  assigned  for  such  a  policy  was  that 
our  manufacturers  required  a  chance  to  get  started.  The 
perils  attending  our  " infant  industries"  were  held  up  as 
the  justifying  motive  for  a  system  of  taxation  which  it  was 
admitted,  laid  more  or  less  burden  upon  the  whole  com- 
munity. It  was  intended  that  this  burden  should  be  suffi- 
cient merely  to  put  the  new  and  untried  and  struggling 
industries  fairly  on  their  legs,  and  that  they  should  then 
enter  into  competition  with  similar  industries  abroad  and 
with  other  industries  at  home  on  equal  terms.  The  moving 
cause  for  protection  was  found  in  the  greater  skill,  expe- 
rience, and  capital  employed  in  foreign  countries,  which  it 
was  hoped  to  counteract  by  a  protecting  duty  for  a  limited 
period.  In  the  whole  course  of  the  tariff  debate  in  Congress 

(504) 


PROTECTION    CHANGED— WHITE.  505 

down  to  the  close  of  the  civil  war,  it  would  be  difficult  to 
find  a  single  suggestion  that  a  protecting  duty  is  a  good 
thing  in  itself,  apart  from  its  supposed  tendency  to  natural- 
ize and  establish  some  industry  to  which  the  resources  of 
the  country  are  so  evidently  adapted  that  it  might  within  a 
reasonable  time  maintain  itself  without  legislative  aid. 

Now, ^however,  protection  is  defended  on  the  ground  that 
it  is  a  good  thing  and  a  right  thing  per  se.  We  hear  little 
or  nothing  about  infant  industries.  It  is  a  long  time  since 
we  have  seen  that  designation  applied,  except  in  the  way  of 
derision,  to  any  American  trade.  The  infant  industries  of 
Henry  Clay's  time  are  full-grown  if  not  decrepit.  We  are 
capable  of  turning  out  as  many  tons  of  pig  iron  and  of  steel 
rails  in  a  year  as  Great  Britain.  The  period  of  infancy  is 
long  past  and  the  period  of  decay  has  begun  in  some  quarters 
where  this  industry  was  once  flourishing  and  dominant.  It 
needs  no  prophet's  vision  to  see  that  the  supremacy  of  Penn- 
sylvania in  the  production  of  pig  iron  will  very  soon  pass 
away,  and  that  in  order  to  keep  her  furnaces  in  blast  she 
will  need  protection  against  Tennessee,  Kentucky,  and  Ala- 
bama, more  than  she  ever  needed  it  against  England. 

But  this  is  not  all  the  change  that  has  come  over  the 
spirit  of  protection.  We  have  not  merely  dropped  the 
argument  founded  upon  infancy,  inexperience,  and  defi- 
ciency of  capital,  but  we  have  taken  up  the  advanced  posi- 
tion that  one  trade  has  as  good  claim  to  protection  as 
another,  irrespective  of  infancy,  want  of  training,  or  want  of 
capital.  The  producer  of  iron  ore,  requiring  nothing  but 
common  labor,  which  any  Italian  immigrant  will  perform  at 
a  dollar  and  twenty-five  cents  per  day,  must  be  protected  to 
the  same  degree  as  the  manufacturer  of  plate  glass  or  the 
producer  of  the  highest  class  of  woven  fabrics.  The  doc- 
trine of  equal  rights  has  surmounted  and  stifled  all  the  old- 
time  ideas  regarding  protection.  The  tariff  must  be  applied 
now  not  because  a  particular  industry  needs  to  be  set  agoing, 
22 


506  PROTECTION   CHANGED — WHITE. 

but  because  it  is  already  going  and  has  been  going  a  hun- 
dred years.  More  than  this  —  the  favors  of  the  tariff  must 
be  awarded  to  the  industry  peculiar  to  one  locality  or 
region,  because  it  has  been  given  to  those  of  another  local- 
ity or  region,  even  though  the  former  (as  in  the  case  of  cop- 
per) may  have  given  indisputable  proof  of  its  ability  to 
defy  foreign  competition  by  underselling  foreigners  in 
foreign  markets. 

This  is  not  all  the  change  that  has  come  to  pass.  The 
early  arguments  for  protection,  founded  exclusively  upon 
the  idea  of  encouraging  manufactures,  have  so  far  suc- 
cumbed to  the  doctrine  of  equal  rights  that  duties  are  now 
imposed  which  expressly  cripple  and  discourage  manufac- 
tures, and  we  hear  the  most  appalling  threats  of  vengeance 
to  be  visited  upon  this  or  that  political  party  if  the  duty  on 
raw  wool,  for  instance,  is  lowered  or  if  the  former  high 
duty  is  not  speedily  reenacted.  The  anaconda  of  protection 
has  wrapped  itself  around  the  woolen  and  worsted  manu- 
facturers till  they  can  scarcely  breathe.  The  producers  of 
iron  ore  actually  got  an  increase  of  duty  last  year  in  a  bill 
intended  to  reduce  the  general  tariff.  The  Morrison  bill 
now  pending  seeks,  among  other  things,  to  bring  the  tariff 
back  to  its  ancient  moorings  by  placing  on  the  free  list  most 
of  the  raw  materials  of  manufacturing  industry.  If  the 
champion  of  the  "  American  system "  were  alive  he  would 
be  filled  with  astonishment  that  anybody  should  oppose  a 
measure  so  obviously  calculated  to  promote  the  interests 
which  he  desired  to  build  up.  He  would  not  be  able  to 
understand  how  the  principles  which  he  advocated  could 
ever  be  distorted  to  the  protection  of  shepherds  and  spade 
laborers,  to  the  detriment  of  weavers  and  puddlers.  He 
would  probably  be  classed  by  the  protectionists  of  the  pres- 
ent day  with  the  emissaries  of  the  Cobden  Club. 

Let  us  not  blame  the  iron  and  coal  and  copper  miners, 
and  wool  growers,  and  lumber-men  too  severely.  They 


PROTECTION    CHANGED — WHITE.  507 

covered  long  ago  that  the  tariff  is  a  game  of  grab.  They 
have  simply  grabbed  what  they  could  in  competition  with 
others.  They  are  under  no  delusions  respecting  infant  in- 
dustries and  American  systems,  or  other  mildewed  and 
moss-grown  catch-words  of  a  past  generation.  They  have 
no  higlier  reverence  for  the  arts  of  spinning  and  smelting 
than  for  those  of  shearing,  and  quarrying,  and  wood-chop- 
ping. They  know  a  dollar  when  they  see  it.  They  find  it 
more  confortable  to  have  the  dollar  in  their  own  pockets 
than  to  muse  over  it  in  some  other  man's.  Fine  phrases 
regarding  the  state  of  general  beatitude  which  results  from 
multiplying  spindles  and  forges  at  their  expense  are  in  their 
eyes  such  frightful  rubbish  that  they  would  knock  the  whole 
tariff  system  into  kindling  wood  without  a  moment's  hesita- 
tion, if  the  doctrines  of  Henry  Clay  were  revived,  and  put 
in  force  by  taking  the  duties  off  the  raw  materials  of  manu- 
factures. Their  contention  is  that  we  have  as  many  spindles 
and  forges  as  can  be  profitably  employed  now;  at  all  events, 
that  the  reasons  for  framing  a  tariff  with  a  view  to  increas- 
ing the  number  of  them  no  longer  exist,  and  hence  that  a 
reduction  of  the  duties  on  raw  materials  means  simply  a 
diversion  of  their  earnings  to  other  people's  tills.  There  is 
a  good  deal  of  force  in  this  view.  Nevertheless  it  is  impor- 
tant that  the  bill  should  be  pushed  to  a  general  debate  in 
Congress  and  the  country  in  order  that  the  people  may  un- 
derstand how  great  a  change  has  taken  place,  in  the  grounds 
upon  which  protection  is  defended,  during  the  past  twenty 
years.  If  the  country  after  a  full  discussion  is  ready  to 
sanction  the  policy  of  taxing  itself  in  order  to  give  profita- 
ble employment  to  common  laborers  rolling  logs  in  the  for- 
ests or  digging  in  ore  beds  and  coal  mines — newly  arrived 
perhaps  from  Italy,  Belgium,  or  Hungary, — so  let  it  be. 
But  let  us  have  the  discussion  at  all  events. 


CHAPTER  XXXVII. 

PROTECTION  DOGMAS  * 
BY  HON.  WM.  M.  SPRINGER. 


I  HAVE  been  somewhat  amused,  at  times,  at  the  arguments 
used  by  gentlemen  on  the  other  side,  the  advocates  of 
the  protective  system,  in  order  to  sustain  their  theories. 
From  these  arguments  I  have  heard  enunciated  as  among 
the  great  principles  of  protection  the  following  propositions: 
First  That  it  is  the  duty  of  the  Government  to  protect 
American  laborers  from  competition  with  the  "  pauper 
labor"  of  Europe  by  the  imposition  of  duties  on  articles 
manufactured  abroad  which  will  compensate  for  the  differ- 
ence in  the  price  of  labor  in  this  country  and  Europe.  This 
is  called  " filling  the  gap7'  between  the  wages  of  home  and 
foreign  labor. 

Second.  That  the  amount  of  duty  required  in  order  to 
"  fill  the  gap  "  must  be  such  as  will  cause  the  price  of  arti- 
cles manufactured  at  home  to  be  increased  to  the  amount  of 
the  duty  on  the  imported  article  of  like  character. 

Third.  That  the  imposition  of  import  duties  does  not 
increase  the  cost  of  imported  articles;  that  the  foreign 
manufacturer  pays  the  duty  for  the  privilege  of  selling  his 
goods  in  this  country. 

Fourth.  That  the  imposition  of  duties  on  imported  arti- 
cles will  have  the  effect  to  reduce  the  cost  of  like  articles 
manufactured  in  this  country. 

*  March  3, 1883,  House  of  Kepresentatives. 

(508) 


PROTECTION    DOGMAS SPRINGER.  509 

All  the  advocates  of  the  protective  system  in  this  House 
have  either  asserted  this  doctrine  or  have  acquiesced  in  the 
assertion  of  it  by  others.  It  is  claimed  that  protection  has 
cheapened  prices  of  iron  and  steel  and  articles  made  from 
them;  that  it  has  cheapened  the  price  of  wool  and  the  man- 
ufactures of  wool  and  cotton  and  of  all  of  the  protected 
articles.  From  these  fundamental  " principles"  the  follow- 
ing deductions  may  be  drawn: 

First.  Protection  increases  prices  of  articles  manufac- 
tured in  this  country. 

Second.  Protection  decreases  the  prices  of  articles  manu- 
factured in  this  country. 

Third.  Protection  is  absolutely  necessary  in  order  to 
"fill  the  gap"  between  the  wages  of  home  and  foreign 
labor. 

Fourth.  Protection  reduces  the  prices  of  home  produc- 
tions and  thus  widens  "the  gap"  which  it  was  intended  to 
close. 

Fifth.     Protection  both  closes  and  widens  <kthe  gap." 

Sixth.  Protection  protects  our  home  labor  against  the 
"pauper  labor"  of  Europe. 

Seventh.  Protection  reduces  the  prices  of  home  labor 
below  the  prices  paid  for  " pauper  labor"  of  Europe. 

Mr.  Speaker,  "  these  great  principles  of  protection,"  and 
the  logical  deductions  therefrom,  prove  the  fallacy  of  the 
protective  system  and  confound  and  overwhelm  its  advo- 
cates. No  arguments  that  the  advocates  of  revenue  reform 
can  produce  so  completely  answer  protection  fallacies  as  do 
protection  arguments  themselves.  Place  their  arguments  in 
juxtaposition  and  their  fallacies  at  once  appear.  I  leave  the 
protective  system  where  its  advocates  have  placed  it.  Its 
fundamental  " principles"  are  like  certain  chemicals;  ke*pt 
separate  they  are  harmless,  mixed  together  they  explode. 


CHAPTEE  XXXVIII. 

PROTECTION  REDUCES  PRICES.* 

BY  PROFESSOR  ROBERT  E.  THOMPSON,  M.A., 
Professor  of  Social  Science  in  the  University  of  Pennsylvania. 


THE  object  and  the  effect  of  protective  duties,  then,  is 
to  enable  the  home  producer  to  furnish  the  manu- 
factured goods  more  plentifully  and  cheaper  than  before  the 
duty  was  imposed.  "  Though  it  were  true,"  says  Alexander 
Hamilton,  "  that  the  immediate  and  certain  effect  of  regula- 
tions controlling  the  competitio%  of  foreign  with  domestic 
fabrics  was  an  increase  of  price,  it  is  universally  true  that 
the  contrary  is  the  ultimate  effect  of  every  successful  manu- 
facture. When  a  domestic  manufacture  has  attained  to 
perfection,  and  has  engaged  in  the  prosecution  of  it  a  com- 
petent number  of  persons,  it  invariably  becomes  cheaper. 
Being  free  from  the  heavy  charges  which  attend  the  impor- 
tation of  foreign  commodities,  it  can  be  afforded  cheaper, 
and  accordingly  seldom  or  never  fails  to  be  afforded  cheaper 
in  process  of  time  than  was  the  foreign  article  for  which  it  is 
the  substitute.  The  internal  competition  which  takes  place 
soon  does  away  everything  like  monopoly,  and  by  degrees 
reduces  the  price  of  the  article  to  the  minimum  of  a  reason- 
able profit  on  the  capital  employed." 

So  well  ascertained  and  so   necessary  is   this   result   as 
regards  the  profits  of  manufacture  that  Professor  Thorold 

*  Political  Economy.    Phila.,  Porter  &  Coates. 

(510) 


PROTECTION   REDUCES   PRICES.  511 

Rogers  alleges  it  as  a  reason  against  protection  "Unless 
the  State  were  to  go  so  far  as  to  grant  a  monopoly  of  pro- 
duction to  one  or  a  few  individuals  whom  it  protects,  it 
could  not  prevent  the  operation  of  that  economic  law  which 
reduces  profits,  other  things  being  equal,  to  an  equality. 
Manufacturers  crowd  into  the  protected  occupation,  and  the 
benefit  intended  to  be  secured  by  the  policy  of  the  govern, 
ment  is  distributed  and  annihilated  by  competition."  Mr. 
Eogers  does  not  seem  to  be  aware  that  this  is  the  very 
"  benefit  intended  to  be  secured."  But  we  have  his  word  as 
to  how  that  policy  does  and  must  work, — above  all  that  it 
involves  no  monopoly. 

"  Competition  being  always  free,"  says  McCulloch,  "among 
home  producers,  the  exclusion  of  any  particular  species  of 
foreign  manufactured  goods  cannot  elevate  the  profits  of 
those  who  produce  similar  articles  at  home  above  the  com- 
mon level,  and  merely  attracts  as  much  additional  capital  to 
that  particular  business  as  may  be  required  to  furnish  an 
adequate  supply  of  goods^ 

Neither  of  these  two  authors,  it  will  be  perceived,  con- 
cedes that  prices  are  brought  down  by  protection  to  the 
foreign  rate;  but  they  both  show  that  the  foolish  clamor  as 
to  the  excessive  profits  of  the  protected  manufacturer  has 
nothing  to  go  upon.  Mr.  D.  A.  "Wells  flatly  contradicts 
his  English  teachers  when  he  says:  "It  not  unfrequently 
happens  that  the  imposition  of  a  tax  in  the  form  of  a  tariff 
on  an  imported  article  is  made  the  occasion  for  very  greatly 
and  unnecessarily  advancing  the  price  of  a  corresponding 
domestic  product." 

What  are  the  reasons  for  this  final  reduction  in  price?  It 
is  because  the  obstacles  to  cheap  production  have  been  over- 
come, and  the  home  producers  are  competing  for  the  home 
market.  These  obstacles  are  manifold.  (1.)  The  lack  of 
security  deters  the  manufacturer  from  putting  his  capital 
into  a  large  undertaking.  He  has  to  make  great  outlays, 


512  PROTECTION   REDUCES   PRICES. 

great  sacrifices  even,  but  he  has  no  security  that  he  will  ever 
reap  the  fruits,  unless  the  home  market  is  secured  to  him. 
He  fears  the  foreign  competition  more  than  that  of  his  com- 
petitors  at  home,  because  the  latter  stand  on  an  equality  of 
power  and  capacity  with  him,  while  the  former  are  able  and 
ready  to  make  large  sacrifices  simply  to  drive  him  out  of  the 
market  and  secure  it  to  themselves.  It  is  not  a  matter  as  to 
which  we  are  left  in  any  doubt  that  artificial  fluctuations  are 
produced  for  this  purpose.  "It  has  already  been  shown," 
says  Coleridge  in  1834,  "in  evidence  which  is  before  all  the 
world,  that  some  of  our  manufacturers  have  acted  upon  the 
accursed  principle  of  deliberately  injuring  foreign  manufac- 
turers, if  they  can."  "Experience,"  says  Blanqui.  one  of 
the  free  trade  economists  of  France,  "has  already  taught  us 
that  a  people  ought  never  to  deliver  over  to  the  chances  of 
foreign  trade  the  fate  of  its  manufactures." 

A  report  presented  to  the  British  Parliament  in  1864  by 
a  commission  appointed  to  investigate  the  state  of  industry 
in  the  mining  districts,  says: — 

"The  laboring  classes  generally  in  the  manufacturing 
districts  of  this  country,  and  especially  in  the  iron  and  coal 
districts,  are  very  little  aware  of  the  extent  to  which  they 
are  often  indebted  for  being  employed  at  all  to  the  immense 
losses  which  their  employers  voluntarily  incur  in  bad  times 
in  order  to  destroy  foreign  competition,  and  to  gain  and 
keep  possession  of  foreign  markets.  Authentic  instances 
are  well  known  of  employers  having,  in  such  times,  carried 
on  their  works  at  a  loss  amounting  in  the  aggregate  to 
£300,000  or  £400,000  in  the  course  of  three  or  four  years. 

"  If  the  efforts  of  those  who  encourage  the  combinations 
to  restrict  the  amount  of  labor  and  to  produce  strikes  were 
to  be  successful  for  any  length  of  time,  the  great  accumula- 
tions of  capital  could  no  longer  be  made  which  enable  a  few 
of  the  most  wealthy  capitalists  to  overwhelm  all  foreign 
competition  in  times  of  great  depression,  and  thus  to  clear 


PROTECTION    REDUCES   PRICES.  513 

the  way  for  the  whole  trade  to  step  in  when  prices  revive, 
and  to  carry  on  a  great  business  before  foreign  capital  can 
again  accumulate  to  such  an  extent  as  to  be  able  to  establish 
a  competition  in  prices  with  any  chance  of  success. 

"  The  ^reat  capitals  of  this  country  are  the  great  instru- 
ments of  Warfare  against  the  competing  capital  of  foreign 
countries,  and  are  the  most  essential  instruments  now 
remaining  by  which  our  manufacturing  supremacy  can  be 
maintained;  the  other  elements — cheap  labor,  abundance  of 
raw  materials,  means  of  communication,  and  skilled  labor — - 
being  rapidly  in  process  of  being  equalized." 

*And  be  it  remembered  that  nobody  asks  that  protection  as  a  system  shall  be 
permanent.  Its  chief  purpose  is  to  give  our  manufacturers  a  chance  to  show 
"what  life  and  energy  there  is  in  them"  ;  for  when  our  industrial  growth  shall 
have  brought  us  abreast  with  rival  nations  it  will  no  longer  be  needed,  except  in 
rare  cases,  such  as  Belgian  competition  with  the  English  iron-men  in  the  British 
market.  Protection  with  this  object  has  the  sanction  of  the  greatest  free-trade 
economists.  Adam  Smith  surlily  conceded  that  a  manufacture  may  sometimes  be 
naturalized  more  readily  in  this  way  than  in  any  other.  Of  his  French  disciples, 
Say,  Blanqui,  Ressl,  Chevalier,  make  the  same  concession  more  fully  and  heartily. 
The  last  named  says:  "Every  nation  owes  to  itself  to  seek  the  establishment  of 
diversification  in  the  pursuit  of  its  people,  as  Germany,  England,  and  France  have 
always  done  ;  and  this  is  not  an  abuse  of  power  on  the  part  of  the  govern- 
ment. On  the  contrary  it  is  the  accomplishment  of  a  positive  duty.  Governments 
are,  in  fact,  the  personification  of  nations,  and  it  is  required  that  they  should  exer- 
cise their  influence  in  the  direction  indicated  by  the  general  interests. 

John  Stuart  Mill  says  :  "  The  superiority  of  one  country  over  another  in  a 
branch  of  industry  often  arises  only  from  its  having  begun  it  sooner.  A  country 
which  has  the  skill  and  experience  to  acquire,  may,  in  other  respects,  be  better 
adapted  to  the  production  than  those  earlier  in  the  field.  A  protecting  duty,  con- 
tinued for  a  reasonable  time,  will  sometimes  be  the  least  inconvenient  mode  in 
which  a  country  can  tax  itself  for  the  support  of  such  an  experiment."  Prof. 
Thorold  Rogers,  scolding  Mr.  Mill  for  this  mischievous  concession,  adds  that  the 
circumstances  of  the  United  States  and  British  colonies  "exactly  square  with  the 
hypothesis  of  Mr.  Mill.  The  countries  are  young  and  rising — industries  as  yet 
nascent  are  thoroughly  suited  to  the  natural  capacity  of  the  region  and  of  the 
people,  the  latter  being  of  the  same  stock  as  the  mother  country.  .  .  . 

There  is  no  reason  apparently,  except  that  of  priority  in  the  market,  why  the 
industry  of  the  old  country  should  not  be  transplanted  to  the  new.— Johnson's 
Encyclopedia,  1887. 

R.  E.  THOMPSON. 


CHAPTER  XXXIX. 

DOES  PROTECTION  RAISE  PRICES  ? 
BY  PROF.  A.  L.  PERRY. 


SOME  protectionists  make  bold  to  deny  that  protective 
tariff-taxes  raise  the  prices  of  corresponding  domestic 
goods.     But  this  cannot  be  logically  denied;  it  can  not  even 
be  decently  denied,  when  the  light  of  the  following  proposi- 
tions is  cast  upon  it: 

1.  It  is  the  sole  design  and  end  of  these  protective  tariff, 
taxes  to  lift  the  level  of  the  prices  of  home-manufactured 
goods  above  the  level  that  prevails  in  other  countries  for  cor- 
responding goods;  that  is  the  whole  theory  and  purpose  of  a 
protective  tariff.     The  men  who  get  these  taxes  actually  put 
on,  and  it  is  a  simple  historical  truth  that  no  protective  tariff  - 
tax  was  ever  put  on  in  this  country  except  at  the  instance 
and  under  the  pressure  of  men  directly  interested  in  such 
rise  of  price;  these  men  know  what  they  are  about,  and  why 
they  are  about  it;  and  it  is  a  safe  step  to  take  to  conclude 
that  what    such    men    shrewdly  design  to  bring  about  is 
actually  accomplished  by  their  device. 

2.  It  has  been  constantly  avowed  by  protectionists  in  the 
tariff  debates  in  Congress — and  never  more  loudly  than  last 
February — that  these  home-made  goods  could  not  be  made  and 
sold  here  for  the  prices  at  which  foreigners  sell  them.     The 
mere  proposal  to  take  off  the  protective  tax  angers  the  pro. 
tectionists  beyond  measure,  because,  as  they  themselves  say, 
domestic  prices  would  then  fall  at  once  to  the  foreign  level. 

(514) 


DOES   PROTECTION    RAISE   PRICES?  515 

Where  does  the  "  protection  "  come  in  if  the  tariff -tax  do  not 
raise  the  price  of  home-made  ware  ?  What  is  the  motive  for 
putting  such  a  tax  on  ?  Why  did  the  Onondaga  Salt  Com- 
pany sell  salt  in  Canada  cheaper  than  in  Syracuse  itself  ?  and 
why  have  the  copper  companies  of  Michigan  sold  copper  this 
very  year  to  foreigners  for  less  than  any  American  citizen 
could  buy  it  of  them  at  wholesale  ? 

3.  Foreign  manufacturers  are  controlling,  in  spite  of  pro- 
tective tariff-taxes,  our  own  home  market  more  and  more 
year  by  year.  How  can  they  actually  pay  these  import 
duties  at  our  custom-houses,  and  still  sell  and  undersell  in 
our  domestic  markets,  unless  the  range  of  our  home  prices 
of  manufactures  is  artificially  and  abnormally  high  ?  Our 
tariff -taxes  are  designed  to  make  and  do  make  prices  so  high 
in  our  markets,  so  high  above  their  level  in  other  countries, 
that  foreigners,  after  adding  the  taxes  at  each  custom-house 
to  the  price  of  their  wares,  can  still  undersell  our  own  man- 
ufacturers at  our  very  doors.  Glassware,  for  example,  is 
very  highly  "  protected  "  by  the  tariff,  and  yet  the  imports 
of  glassware  in  1882  through  our  custom-houses,  and  actually 
paying  the  duties,  were  more  than  ten  times  greater  than  the 
exports  of  glassware,  because  the  artificial  prices  here  invite 
foreigners  to  come  with  glass  in  their  hands.  We  imported 
that  year  $7,443,211  of  glassware.  Just  so  of  other  wares. 
The  increase  of  the  importations  in  1882  over  1881  was,  in 
silk  goods,  twenty-five  per  centum ;  in  cotton  goods,  twenty- 
five;  in  woolen  goods  thirty-four,  and  even  in  iron  and  steel 
goods,  seven  per  centum.  This  increase  in  the  imports 
of  foreign  manufactures,  owing  to  the  high  prices  caused  by 
the  tariff,  has  been  going  on  for  years.  Comparing  1877 
with  1882,  the  increase  in  silk  goods  was  from  $21,830,000 
to  $41,400,000;  in  cotton  goods,  from  $18,923,000  to 
$40,000,000;  in  woolen  goods,  from  $25,000,000  to  $42,- 
000,000;  and  in  iron  and  steel  goods,  from  $9,570,000  to 
$50,000,000. 


516  DOES    PROTECTION    RAISE   PRICES? 

4.  In  October,  1871,  occurred  the  great  fire  in  Chicago. 
In  the  winter  following  a  bit  of  legislation  took  place  in 
Congress  in  consequence,  which  unmistakably  shows  the 
sense  of  that  body  to  be  that  tariff-taxes  raise  the  price  .of 
home  products.  A  bill  received  the  signature  of  President 
Grant,  April  5,  1872,  which  had  passed  both  Houses  by  large 
majorities,  to  exempt  for  one  year  all  building  material,  except 
lumber,  from  the  operation  of  tariff  taxes  for  tlie  benefit  of  Chi- 
cago alone.  Why  did  Congress  hasten  to  take  off:  the  taxes 
for  the  benefit  of  Chicago  unless  the  taxes  raised  the  price 
of  building  material  ?  Here  is  a  public  confession  of  the 
most  striking  kind  that  the  tariff  is  used  to  raise  prices  for 
United  States  citizens  to  pay.  And  why  was  lumber  excepted 
from  the  operations  of  that  bill  of  remissions  ?  Because 
Michigan  and  Wisconsin  lumber  lords,  who  had  got  the 
tariff-tax  on  foreign  lumber  put  on  on  purpose  to  raise  the 
price  of  domestic  lumber,  went  to  Washington  in  haste  to 
get  lumber  excepted  from  the  materials  to  be  cheapened  for 
the  relief  of  burnt  Chicago.  No  proposition  in  the  world  can 
be  more  certain  than  this,  that  protective  tariff -taxes  are  put 
on  and  kept  on  for  the  sole  sake  of  raising  the  prices  of  cer- 
tain wares,  and  the  taxes  do  in  fact  what  they  are  meant  for. 

The  question  every  workingman  is  asking  is,  whether  free 
trade  will  lower  wages  or  not.  That  is  the  practical  question 
in  this  tariff  issue. 

Every  laboring  man  who  has  considered  the  subject, 
knows  this,  that  a  protective  tariff  raises  the  prices  of  nearly 
every  thing  he  has  to  buy  and  makes  living  more  costly. 
No  intelligent  protectionist  denies  this.  But  protectionists 
tell  the  laboring  men  that  the  increased  cost  of  living  is 
more  than  made  up  by  the  higher  wages  protection  gives. 

Free-traders  deny  absolutely  that  protection  raises  wages. 
They  go  further.  Free-traders  assert  positively  that  protec- 
tion,  in  the  end,  lowers  wages. 

Fortunately  there  is  no  need  of  arguing  the  matter.     We 


DOES   PROTECTION    RAISE   PRICES? 


517 


can  give  the  facts.  From  1850  to  1860  was  a  period  of  low 
tariff — a  tariff  for  revenue  only.  During  that  period  the 
tariff  averaged  only  about  seventeen  per  cent.  From  1860 
to  1880  >vas  a  period  of  high  tariff,  the  highest  tariff  ever 
known — a  tariff  for  protection.  Now,  if  what  protectionists 
tell  the  laboring  men  is  true,  then  wages  ought  to  have 
gone  down  between  1850  and  1860,  and  they  ought  to 
have  gone  up  between  1860  and  1880.  If  what  protec- 
tionists say  is  true  the  manufactures  of  the  country  ought 
to  have  declined  between  1850  and  1860,  and  increased 
wonderfully  between  1860  and  1880.  What  are  the  exact 
facts  ?  From  the  census  reports  of  the  United  States  for 
1850,  1860,  1870,  and  1880  we  find  that:  Between  1850 
and  1860  the  wealth  and  wages  of  the  country  increased  in 
a  greater  ratio  than  between  1860  and  1880.  Here  are  the 
percentages  of  increase  as  compiled  by  Mr.  Philpott  of 
Iowa,  from  the  census  reports.  It  shows  the  exact  per- 
centage of  increase  between  1850-60  in  the  first  column, 
and  the  percentage  of  increase  for  each  of  the  ten  years 
between  1860-80: 


LINES  OR  PROGRESS. 

1850-1860. 

Average  each 
Ten  Years— 
1860-80. 

Population,  

35.5 

26.2 

Wealth,  

126.6 

61.0 

Foreign  commerce,  aggregate,  .....  .  .  . 

131.0 

45.6 

Foreign  commerce,  per  capita,  
Railroads  aggregate  

70.3 
240.0 

15.2 

69  0 

Railroads    per  capita      

150  0 

34  0 

Capital  in  manufactures,  

90.0 

66.0 

Wages  in  manufactures,  aggregate,  
Wages  in  manufactures,  per  hand,  
Products 

60.3 
17.3 
85.0 

58.2 
9.4 
69  6 

Value  of  farms,  

103.0 

23.6 

Farm  tools  and  machinery,  

62.0 

27.7 

Live  stock  on  farms   

100.0 

17.3 

518  DOES    PROTECTION    RAISE   PRICES  ? 

Every  laboring  man  can  here  see  for  himself  whether  pro- 
tection increases  wages  or  not.  Between  1850-60  the  wages 
per  hand  increased  seventeen  and  three-tenths  per  cent., 
while  between  1860-80  they  increased  only  nine  and  one- 
fourth  per  cent.  Under  a  low  tariff  they  increased  nearly 
twice  the  ratio  as  under  a  high  tariff,  and  between  1870—80 
wages  per  capita  actually  decreased.  Under  a  low  tariff 
manufacturers  increased  ninety  per  cent.,  while  under  a  high 
protective  tariff  they  increased  only  sixty -six  per  cent. 
Free-traders  maintain  that  protection  falls  most  heavily 
on  the  farmer.  Look  at  the  above  table.  Under  a  low 
tariff  the  value  of  farms  increased  one  hundred  and  three 
per  cent.,  while  under  a  high  protective  tariff  it  increased 
only  twenty-three  and  six-tenths  per  cent.  Under  a  "  tariff 
for  revenue  only  "  the  live  stock  on  farms  increased  one  hun- 
dred per  cent. — exactly  doubled — while  under  a  high  pro- 
tective tariff  it  only  increased  seventeen  and  three  tenths  per 
cent.,  or  about  one-sixth. 

Protectionists  call  free-traders  "theorists,"  " dreamers." 
Well,  the  above  figures  and  facts  taken  from  the  census  re- 
ports are  not  "  theories  "  or  "dreams."  They  are  solid,  un- 
deniable facts.  And  every  protectionist  who  tries  to  per- 
suade a  laboring  man  that  protection  raises  wages,  should 
first  explain  the  above  facts. 

HOW    PROTECTION    LOWERS    WAGES. 

When  a  workingman  hears  a  man  talk  about  free  trade, 
he  always  asks  the  question,  "Won't  free  trade  lower 
wages  ?  "  That  is  a  practical  question.  Every  intelligent 
free-trader  will  answer  at  once,  "  Free  trade  will  not  lower 
wages.  On  the  contrary  protection  lowers  wages."  Now 
it  is  easy  enough  to  make  this  answer,  but  it  is  some- 
times hard  to  prove  it.  Sometimes  a  workingman  wants  to 
see  the  "figures."  He  wants  to  have  it  shown  to  him  in 
black  and  white.  Fortunately  the  figures  can  be  given.  The 


DOES   PROTECTION   RAISE   PRICES?  519 

statistics  which  show  that  protection  does  not  raise  wages, 
are  within  the  reach  of  every  man.  Every  workingman  can 
satisfy  himself  that  any  slight  advance  he  may  receive  in  his 
nominal  wages,  is  more  than  eaten  up  by  the  increased  cost 
of  living. 

If  there  is  one  State  in  the  Union  that  should  be  benefited 
by  protection,  that  State  is  Massachusetts.  It  is  full  of  pro- 
tection  and  always  has  been.  If  protection  raises  wages 
anywhere  it  ought  to  in  Massachusetts ;  but  does  it  ? 
Hon.  Carroll  D.  Wright,  labor  commissioner  of  Massa- 
chusetts, a  Republican,  a  State  official  and  a  protectionist, 
gives  the  condition  of  the  laboring  men  in  1881  as  compared 
with  1860.  He  gives  the  wages  in  1860  and  in  1881,  and 
also  gives  the  cost  of  living  in  1860  and  1881.  This  is  the 
conclusion  he  comes  to  in  his  own  words: 

"  Covering  the  whole  period  of  twenty-one  years,  there  was  an 
average  increase  in  wages  of  31.2  per  cent.,  and  in  prices  41.3 
per  cent.  That  is,  between  1860  and  1881,  the  workingman  has 
suffered  a  reduction  of  ten  per  cent,  in  the  purchasing  power  of 
his  wages,  and  this  between  a  dead  level  year  and  one  of  general 
prosperity." 

Workingmen  can  see  from  the  above  how  protection  raises 
wages.  It  does  appear  to  raise  wages.  The  workingman 
gets  more  money  for  his  work,  but  it  is  exactly  as  free  traders 
say,  it  costs  him  so  much  more  to  live  that  the  additional 
money  received  is  more  than  eaten  up.  Wages  go  up  a  little, 
but  cost  of  living  goes  up  more. 


520 


DOES   PROTECTION    RAISE   PRICES? 


*WHAT  ONE  DOLLAR  COULD   BUY  I1ST 


1860. 

1872. 

1878. 

1881. 

Flour,  superfine,  

pounds, 

25.64 

18.18 

22.72 

19.76 

Codfish.  

18  87 

12  20 

16  67 

13  33 

Beans,  

12.66 

10.52 

12.05 

7.54 

Coffee,  

4.36 

2.35 

3.77 

3  47 

Sugar,  

9.70 

8.33 

10  00 

9  09 

Soap,  

11.49 

12  50 

12  34 

14  81 

Beef  roasting,  ,  .  .  . 

9  18 

5  26 

6  94 

5  88 

"       SOUD,  .  . 

20.83 

13  33 

18  86 

18  18 

^'  v 
corned  

15  38 

9  52 

12  34 

9  75 

Veal,  hindquarters,  
Mutton,  f  orequarters,  
Hams,  

9.18 
13.51 

7.75 

5.85 
9.80 
7.41 

6.53 
9.70 

8.07 

6.34 
8.82 
6.55 

Potatoes,  

bushels, 

1.67 

0.97 

1.03 

0  79 

Milk            

quarts 

21  27 

12  50 

18  86 

16  66 

Coal    

pounds, 

312  00 

217  00 

310  00 

255  00 

Shirting,  4-4,  
Sheeting,  

yards,.  . 

10.87 
9  34 

7.69 
7  14 

13.33 
11  11 

11.42 
9  30 

Rent,  four  room  tenement,  . 
Board,  men,  

days,.  .  . 

6.75 
2.51 

2.03 
1.24 

5.40 
1.67 

3.75 
1.47 

"      women  

« 

3  92 

1  87 

2  63 

2  33 

*This  Table  was  inserted  l)y  the  compiler  and  taken  from  J.  Schoenhof's 
Vvork  entitled  The  Destructive  Influence  of  the  Tariff.  Published  by  G.  P. 
Putnam's  Sons,  N.  Y. 


CHAPTER  XL. 

COMPARING  AMERICAN  WAGES  WITH  ENGLISH 
WAGES,  AND  SHOWING  HOW  SMALL  THE  DIF- 
FERENCE IN  THE  PAY,  AND  HOW  SMALL  A 
TARIFF  WOULD  BE  NEEDED  TO  PROTECT 
AMERICAN  LABOR,  IF  RAW  MATERIALS  WERE 
FREE.* 


THE  superiority  of  our  means  of  production  being 
acknowledged,  but  little  remains  to  be  said  to  demon- 
strate that  our  industries  need  no  protection  to  enable  them 
to  compete  successfully  with  Europe,  provided  they  share 
the  advantages  that  Europe, — i.  e.,  England,  Germany, 
etc., — possesses;  namely,  free  raw  materials.  Our  exports 
in  cotton  goods  are  sufficient  evidence  of  this.  The  same 
may  be  said  of  articles  where  the  skill  of  the  workman,  the 
inventive  genius  of  the  American,  comes  into  action.  In 
fact,  wherever  the  value  of  the  work  bears  a  very  high  rela- 
tion to  the  value  of  the  raw  material,  there  we  can  freely 
compete  with  foreign  nations.  It  is  so  in  the  case  of 
machinery,  tools,  implements  of  all  sorts  made  of  iron  and 
steel.  Though  they  are  made  of  materials  taxed  more 
heavily  than  the  finished  goods,  yet  the  superiority  of 
American  workmanship  is  able  to  overcome  these  burdens. 
Wherever  labor  largely  preponderates  in  the  combined  value 
of  labor  and  materials,  there  we  excel.  Of  course,  in 
heavy  goods,  requiring  little  skill  and  labor,  whose  value 

*  J.  Schoenhof  in  The  Destructive  Influence  of  the  Tariff  upon  Manufacture  and 
Commerce,    G.  P.  Putnam's  Sous,  New  York. 

(521) 


522 


AMERICAN   AND   ENGLISH   WAGES. 


lies  chiefly  in  the  material,  competition  is  altogether  out  of 
the  question.  This  alone  ought  to  prove  conclusively  that 
though  we  pay  in  most  fields  better  wages  than  even  the 
English  —  and  they  pay  the  highest  wages  in  Europe,  — 
we  still  make  goods  that  can  fully  compete  with  theirs. 

"We  may  consider,  therefore,  a  protective  tariff,  such  as  we 
enjoy,  as  an  absolute  superfluity  that  does  not  benefit  the 
workingman  (on  the  contrary,  does  him  harm  in  lessening 
the  value  of  his  wages),  cripples  the  manufacturer  in  nar- 
rowing his  field  of  operation,  and  most  completely  annihi- 
lates our  foreign  commerce.  And  manufacturers  cannot 
prosper  without  the  aid  of  commerce. 

Some  people,  however,  after  all  that  has  been  said  of  the 
relative  cheapness  of  our  work,  may  still  be  in  doubt  as  far  as 
our  competitive  capacity  in  regard  to  England  in  concerned; 
—  the  country  which  in  Europe  pays  the  highest  wages  and 
makes  the  cheapest  goods.  To  dispel  such  doubts  I  will 
compare  the  rates  paid  here  with  those  paid  in  Europe  in 
the  principal  industries: 

1.  Cotton  Goods  —  Mr.  Carroll  D.  Wright  states  the 
average  weekly  wages  in  Lancashire  and  Manchester: 


Lancashire. 

Massachusetts. 

Difference. 

Of  weavers    

$5.28 

$5.64 

$0.36 

Of  mule  spinners,  

7.80 

10.09 

2.29 

$13.08 

$15.73 

$2.65 

Considering  this  to  be  a  fair  average  of  differences  paid  to 
the  various  employees  of  the  cotton  mills  in  the  respective 
countries,  then  we  pay  our  operatives  just  twenty  per  cent, 
more  than  the  English  pay.  And  the  English  pay  about 
fifty  per  cent,  more  than  the  Germans  pay  their  operatives, 


AMERICAN    AND    ENGLISH    WAGES.  528 

and  yet  we  are  exporters  of  cotton  goods  to  both  Germany  * 
and  England.  The  figures  of  Mr.  Wright  find  contradiction 
from  various  quarters.  Mr.  J.  Chase,  member  of  Congress 
from  Rhode  Island,  himself  a  cotton  manufacturer,  places 
the  difference  as  high  as  sixty-two  per  cent. 

According  to  the  last  census,  however,  the  average  wages 
for  all  cotton  mill-hands  are  $246  for  the  year,  or  $4.73  a 
week,  j  which  would  imply  earnings  below  those  given  by 
Mr.  Wright.  It  is  doubted  whether  our  cotton-goods  opera- 
tives can  earn  more  than  the  English.  Granting,  however, 
for  argument's  sake,  that  they  earn  twenty-five  per  cent, 
more,  then  this  surplus  of  earnings  is  more  than  balanced 
by  longer  working  hours  —  sixty  hours  constituting  a  week 
in  Massachusetts  (other  States,  having  no  legal  limitation, 
work  longer  hours  yet),  against  fifty-four  to  fifty-six  hours 
in  England,  and  by  higher  speed  and  greater  perfection  of 
our  productive  methods.  But  let  us  waive  all  the  advant- 
ages derived  from  these  points  and  take  twenty  per  cent,  as 
representing  the  proportion  of  wages  to  the  product  of  the 
cotton  mills,  then  a  tariff  of  five  per  cent,  on  cotton  piece- 
goods  would  cover  the  whole  difference  in  the  earnings  of 
our  operatives.  The  old  tariff  taxed  cotton  goods  thirty- 
five  per  cent,  where  ad  valorem  rates  were  imposed.  The 
new  tariff  raised  this  to  forty  per  cent.J  Specific  rates 
were  reduced  somewhat,  but  not  sufficiently  to  compensate 
for  the  great  decline  in  the  price  of  cotton  that  has  taken 
place  since  1865.  Unbleached,  from  five  cents  to  four  cents 
per  square  yard  !  Bleached,  from  five  and  one-half  to  five 

*  This  we  are  able  to  do,  notwithstanding  Germany's  tariff  of  forty  marks  or 
ten  dollars  on  the  hundred-weight  of  cotton  goods.  One  hundred  pounds  Ger- 
man weight  equals  one  hundred  and  ten  pounds  American. 

t  Where  the  annual  average  of  earnings  in  any  specified  industry  is  given,  it 
must  be  borne  in  mind,  that  this  includes  high  and  low  wages,  salaries  of  clerks, 
etc.,  which  reduces  the  individual  earnings  of  the  largest  proportion  of  workers 
to  a  sum  materially  below  the  average. 

$  This  includes  cotton  velvets,  embroideries,  laces,  etc.,  which  are  all  raised 
from  thirty-five  to  forty  per  cent. 


524  AMERICAN    AND    ENGLISH    WAGES. 

cents !  on  goods  counting  over  two  hundred  threads  to  the 
square  inch.  These  comprise  all  fine  goods  such  as  nain- 
sooks, mulls,  lawns,  etc.,  which  are  largely  used  by  Ameri- 
can manufacturers  of  lace  goods  and  trimmings,  who  in 
most  instances  have  to  pay  more  for  duties  on  their  mate- 
rials than  on  the  finished  goods  of  their  respective  branches. 
2.  Iron  and  Steel  —  (a)  Pig-iron  „  Mr.  Joseph  D.  Weeks 
of  Pittsburgh,  one  of  our  best  experts,  gives  the  price  paid 
for  labor  in  Pittsburgh  to  make  a  ton  of  pig-iron: 

Labor  on  mining  ore  for  one  ton  of  pig-iron,  @  $1.40,  =       $2.38 
Labor  on  mining  coal  and  making  coke  necessary  for 

ton  of  pig-iron, .  .  .  .  .  .1.25 

Labor  on  limestone,.  .  .  .  .  .30 

Labor  at  furnace,     .  .  .  .  .  .         1.25 

$5.18 

In  Cleveland,  England,  $3.17  is  paid,  against  $5.18  in 
Pittsburgh.  This  leaves  $2.01  more  pay  for  all  the  work- 
ingmen  that  are  employed  in  raising  the  ore,  the  coal,  and 
the  limestone,  and  making  the  iron.  To  offset  this,  in  addi- 
tion to  the  transportation  expenses,  commission  charges, 
etc.,  of  from  $5  to  $6  on  a  ton  of  pig-iron,  the  tariff  gives 
$6.72,  which  is  a  total  of  $12  to  $13  protection.  The 
ruling  price  in  England  of  pig-iron  was  last  year,  1882, 
485.  to  505.,  or  say,  in  round  figures,  $12;  the  price  of 
American  pig  No.  1  about  $25.  Now  the  price  for  Cleve- 
land (English)  pig  is  405.  to  435.  For  American  pig  in 
Pittsburgh  $18  to  $20  for  No.  2,  and  $21  to  $22  for  No.  1. 
(b)  Steel  rails  and  other  steel,  bars,  rods,  etc.:  Product, 
983,039  tons,  at  an  outlay  for  wages  of  $4,930,009,  or 
$5.01-J  for  each  ton  produced.  This  is  what  the  American 
workingman  gets.  Protection  on  rails  now  $17,  against 
the  former,  $28.  According  to  Leone  Levi,  the  English 
statistician,  and  Mr.  Edward  Young,  the  former  Chief  of 
our  Bureau  of  Statistics,  the  average  wages  in  English  steel 


AMERICAN    AND    ENGLISH   WAGES.  525 

works  were  about  325.  or  about  $8  a  week  for  skilled  labor, 
or  $1.35  a  day,  and  21  s.  a  week  for  unskilled  labor,  or  87 
cents  a  day.  This  gives  the  American  steel-worker  seventy- 
three  per  cent,  more  than  his  English  brother  gets.  This, 
however,  is  offset,  as  shown  before,  by  our  better  and 
quicker  methods  of  manufacture.  But  granting,  for  argu- 
ment's sake,  even  fifty  per  cent,  more  as  cost  of  labor  in  this 
country,  then  this  would  add  to  the  cost  of  a  ton  of  Ameri- 
can steel  the  magnificent  sum  of  $1.67  for  wages  as  against 
$28  or  $17,  respectively,  of  protection  for  the  mill-owners. 
Protection  that  is  granted  by  freight  and  other  charges  on 
the  imported  stuff  ought  not  to  be  lost  sight  of  in  this 
instance  either. 

11 3.  Leather — upper  leather  and  calfskin  manufacture — 
Tanners'  wages — Eastern  and  Western  cities  of  the  United 
States,  $10  to  $11  per  week.  Curriers'  wages — Eastern  and 
"Western  cities  of  the  United  States,  $14  to  $15  per  week. 
In  country  towns  of  the  United  States,  $2  to  $3  a  week 
less.  Morocco  leather — Tanners'  wages — New  York,  $12  a 
week;  Philadelphia,  $12  a  week;  Wilmington,  Del.,  $10  a 
week;  Lynn,  Mass.,  $10  a  week. 

"  Morocco  finishing  by  machinery — Wages  of  finishers — 
New  York,  $13  to  $14  per  week;  Philadelphia,  $13  to  $14 
per  week;  Lynn,  Mass.,  $11  to  $12  per  week. 

"  Sole-leather  tanners — In  the  country  towns  of  the  United 
States,  $1.25  per  day;  in  Philadelphia,  Baltimore,  Louis- 
ville, Cincinnati,  and  Chicago,  $9  to  $10.50  per  week,  ten 
hours  a  day;  in  London,  England,  $8.50  to  $9.50  per  week, 
nine  hours  a  day's  work;  in  the  country  towns  of  England 
and  in  Scotland,  $6  a  week,  nine  hours  a  day's  work;  in 
Germany,  80  cents  to  $1  a  day,  ten  hours  a  day's  work;  in 
French  provinces,  $5  to  $5.50  a  week;  in  Paris  (France), 
$1  a  day. 

"  Sole-leather  curriers — In  country  towns  of  the  United 
States,  $1.50to$1.60a  day,  ten  hours  a  day;  in  London, 


52(J  AMERICAN    AND    ENGLISH    WAGES. 

England,  $10  to  $13  a  week,  nine  hours  a  day;  in  the  coun- 
try towns  of  England  and  in  Scotland,  $7  to  $7.50  a  week; 
in  Leeds,  England,  East  India  tanned  skins,  $6.50  to  $7.50 
a  week;  in  Germany,  $1  to  $1.15  a  day,  ten  hours  a  day; 
in  the  provinces  of  France,  $5  to  $6  a  week;  in  Paris,  $9  a 
week." 

The  above  is  an  abstract  of  a  report  made  by  the  Shoe 
and  Leather  Reporter  to  Mr.  Nimmo.  The  correctness  of  the 
list  is  confirmed  by  twelve  business  firms  in  the  line.  It 
will  be  seen  that  the  wages,  considerably  higher  than  in 
Germany  and  France,  are  not  much  above  the  average  wages 
paid  in  England:  for  tanning  say  twelve  and  a  half  per 
cent. ;  while  curriers  get  about  thirty  per  cent.  more.  As 
the  American,  however,  has  ten  working  hours  against  the 
Englishman's  nine  hours,  the  surplus  added  to  the  cost  of 
production  on  account  of  higher  wages  is  reduced  in  tanning 
to  a  minimum — less  than  five  per  cent. ;  in  currying  to  about 
fifteen  per  cent. 

As  wages  determine  only  a  correspondingly  small  part  of 
the  value  of  the  whole  product,  it  is  evident  that  this  indus- 
try can  afford  to  do  without  the  paternal  care  of  the  Gov- 
ernment. We  are  heavy  exporters  of  leather.  Hides  are 
not  protected.  The  lord  of  the  prairie,  the  aristocratic  ox, 
under  a  democratic  form  of  government  does  not  enjoy  the 
protection  that  is  extended  to  his  plebeian  cousin,  the  sheep. 

4.  Silk  goods — The  difference  in  wages  varies  largely 
between  the  different  European  countries — England,  Ger- 
many, France,  and  Switzerland.  A  statement  of  wages 
and  earnings  would  give  a  very  inadequate  idea.  The  vari- 
ous modes  of  operation  have  to  be  taken  into  consideration. 
The  greater  efficiency  of  the  workers,  and  the  application  of 
most  improved  machinery,  to  a  large  extent  obliterate  the 
influence  of  higher  earnings  on  cost  of  product.  Ameri- 
cans earn  from  sixty-five  to  seventy-five  per  cent,  more  than 
the  English;  perhaps  one  hundred  per  cent,  more  than  Ger- 


AMERICAN    AND    ENGLISH    WAGES.  527 

man  operatives.  The  acknowledged  superiority  of  our 
working  methods  reduces  the  difference  materially;  fifty  per 
cent.,  as  an  addition  of  cost,  would  be  a  very  high  estimate. 
Many  of  our  silks  are  produced  in  New  Jersey,  whose  pro- 
duct in  1880  was  $13,850,000  (cost);  of  this  there  was  paid 
in  wages  $4,177,000,  or  thirty  per  cent.;  fifty  per  cent,  of 
thirty  per  cent,  is  equal  to  fifteen  per  cent  All  the  protec- 
tion needed  to  protect  the  workingman  is  fifteen  per  cent. 
A  tariff  of  fifty  per  cent,  is  certainly  excessive,  in  view  of 
the  enjoyment  of  free  raw  silk.  A  tariff  of  thirty  per 
cent.,  with  free  materials,  would  give  ample  protection  to 
the  silk  manufacturer.  It  is  doubtful  whether  the  present 
rate  of  protection  amounts  to  much  more  than  that,  consid- 
ering the  latitude,  under- valuation,  and  smuggling  enjoyed 
under  the  former  tariff.  The  reduction  to  fifty  per  cent, 
still  gives  ample  opportunities  for  these  practices. 

5.  Woolens — From  the  report  of  the  United  States 
Consul  at  Leeds  the  following  may  be  taken  as  ruling  prices 
in  1878,  the  week  having  fifty -four  working-hours  against 
not  less  than  sixty  hours  in  America: 

Wool- sorters  per  week,     ....  $6. 24  to  $6. 72 

Scourers  and  dyers  per  week,  .        .        .  4.80  to  5.75 

Spinners  per  week, 7. 70  to  9.69 

Weavers,  men,  per  week,          .        .        .  6.00  to  8.40 

Weavers,  women,  per  week,     .        .        .  3. 60  to  4.80 

Pressers  per  week, 5.75  to  6.72 

Laborers  per  week, 4. 32  to  5.25 

Considering  the  difference  in  time,  I  doubt  wnether  our 
woolen  mills  pay  much  more  in  wages  for  a  given  piece  of 
work  than  the  English.  $4.50  to  $6.00  for  women  and 
$6.00  to  $9.00  for  men  are  fair  average  wages  of  operatives 
in  American  woolen  mills.  Still  we  have  a  specific  and  an 
ad  valorem  duty  to  pay  on  woolens,  averaging  fully  sixty  per 
cent,  even  after  the  reduction. 

Kpw;  I  ask  any  candid  manufacturer  whether  his   "in- 


528  AMERICAN   AND    ENGLISH   WAGES. 

fant  "  industry  would  not  be  fully  protected  with  a  tariff  of 
twenty- five  per  cent.,  plain  and  simple,  if  he  had  wool  and 
other  raw  materials  free  of  duty?  With  free  raw  materials 
he  could  build  up  an  export  trade  and  thereby  give  more 
steady  employment  to  his  help. 

6.  Coal,  anthracite — In  1880  we  mined  27,433,000  tons, 
and  paid  in  wages  $21,680,000,  or  seventy-nine  cents  a  ton. 

Coal,  bituminous — Product,  40,311,000  tons;  wages,  $30,- 
707,000,  or  seventy -six  cents  on  the  average  a  ton,  Pennsyl- 
vania producing  18,000,000  tons,  at  a  cost  of  only  sixty-four 
cents  a  ton  for  wages. 

I  leave  the  intelligent  reader  to  determine  for  himself 
whether  a  protective  tariff  of  seventy-five  cents  is  required 
to  secure  to  the  working-man  sixty-four  cents  in  wages. 

We  have  turned  a  page  in  our  history.  We  have  become 
a  great  manufacturing  nation.  The  narrow  confines  in 
which  the  tariff  encircles  us  must  give  way  before  the  all- 
over-powering  energy  of  a  young  nation.  A  thorough 
revision  of  the  tariff  upon  the  basis  of  free  raw  materials 
has  become  an  urgent  necessity  for  the  preservation  of  our 
vast  manufacturing  industries. 


CHAPTER  XLI. 

EXTRACTS    FROM   THE   OPINIONS   OF    EMINENT 

MEN. 


HON.  JOHN  SHERMAN. 

FEBRUARY  9,  1888. 

policy  of  protection  is  founded  upon  the  idea  that 
_L  it  is  best  for  us  as  a  nation  to  produce,  by  American 
labor,  as  many  of  the  articles  essential  to  human  life  and 
comfort  as  possible;  that,  to  encourage  their  production,  we 
are  justified  in  levying  upon  foreign  articles  that  come  into 
competition  with  ours  such  reasonable  rates  of  duty  as  will 
induce  capital  to  embark  in  such  industries,  and  secure  to 
Ame^an  workingmen  reasonable  wages  consistent  with  the 
higher  wants  and  the  better  food,  clothing,  and  shelter  de- 
manded by  American  workingmen.  The  object  of  all  this 
is  to  secure  the  greatest  diversity  of  employments  by  the 
substitution  of  American  products  for  foreign  products. 
When  this  was  first  adopted  there  were  practically  no 
manufactures  in  America,  and  the  principal  object  was  to 
develop  the  simpler  and  ruder  forms  of  manufacture  and 
the  raw  materials  of  industry.  Now  our  manufactures  have 
grown  to  such  a  marvelous  degree  that  they  amounted  in 
1880,  according  to  the  census,  to  $5,400,000,000,  and  accord- 
ing to  an  estimate  made  three  years  ago  to  over  $6,000,000,- 
000,  and  now  to  near  $7,000,000,000.  The  question  has 
arisen  whether  the  policy  of  protection  should  extend  to 
raw  materials  produced  on  the  farm  and  from  the  mine,  or 
23  (529) 


530  OPINIONS   OF    EMINENT   MEN. 

whether  these  should  be  admitted  free  of  duty.  "We  all 
agree  that  all  crude  articles  necessary  for  manufacture,  that 
cannot  with  reasonable  labor  be  produced  in  this  country, 
ought  to  be  admitted  duty  free.  More  than  $100,000,000 
in  value  of  such  articles  are  now  admitted  duty  free;  but 
the  crude  materials  for  manufacture  raised  on  our  farms  or 
in  our  mines  which  come  into  competition  with  foreign 
labor,  have  been  considered  just  objects  of  protection.  Now 
it  is  proposed  to  place  these  upon  the  free  list,  and  continue 
the  protection  to  manufactures.  But  such  a  decision  would 
be  an  abandonment  of  the  whole  principle  of  protection. 
The  benefits  of  this  policy  must  be  reciprocal,  and  the  system 
upon  which  it  is  founded  must  be  universal.  The  American 
farmer  produces  wool  with  the  same  competition  that  the 
manufacturer  produces  woolens,  and  should  have  the  same 
consideration  and  protection  in  his  employment  that  is  freely 
conceded  to  the  manufacturer,  —  no  more,  no  less.  His 
product  is  the  completed  article  of  his  labor.  And  so  with 
the  mining  and  smelting  of  ores,  the  rich  resources  planted 
by  Providence  in  every  part  of  our  country.  The  labor 
bestowed  in  their  development  is  as  much  entitled  to  the 
friendly  aid  of  the  government  as  the  finest  fabric  of  the 
loom  or  the  completed  work  of  mechanical  skill.  When 
you  remember  that  more  than  a  million  farmers  are  engaged 
in  raising  wool,  and  produce  282,000,000  pounds,  and  hun- 
dreds of  thousands  of  laboring  men  are  required  to  mine 
more  than  ten  million  tons  of  iron  ore,  from  Alabama  to  the 
borders  of  Lake  Superior,  and  from  Lake  Champlain  to  the 
Pacific  Ocean,  you  must  see  that  to  leave  these  industries 
unprotected  against  the  competition  of  the  poorest  paid  and 
raost  degraded  labor  of  Europe  and  Africa,  would  be  inde- 
fensible, and  expose  the  whole  system  to  overthrow.  All 
that  the  farmer  or  the  miner  asks  is  that  reasonable  and 
proper  protection  which  is  cheerfully  extended  to  all  branches 
of  manufacturing  coming  into  competition  with  foreign  in- 


HON.    JOHN    SHERMAN.  531 

dustry;  that  their  labor  and  employments  receive  the  same 
consideration  in  framing  your  tariff  laws  given  to  other 
industries.  They  only  ask  enough  duty  to  compensate  for 
the  difference  in  the  price  of  labor  here  and  the  countries 
with  which  they  compete.  Nor  do  they  ask  duties  on  grades 
of  wool  that  tluey  cannot  produce. 

Now,  gentlemen,  you  may  ask  me  what  I  have  to  say 
about  tariff  reform.  1  answer  that  I  am  decidedly  in  favor 
of  tariff  reform,  always  have  been,  and  always  will  be.  1 
have  participated  in  tariff  reform  since  1855;  but  my  idea 
of  tariff  reform  is  not  especially  to  make  our  duties  accepta- 
ble to  foreign  nations,  but,  rather,  to  promote  the  interests 
of  our  own  people;  not  to  take  lessons  from  the  Cobden 
Club  or  the  English  aristocracy,  but  from  Washington,  Jef- 
ferson, Jackson,  and  Lincoln,  and  to  follow  the  teachings  of 
Webster  and  Clay.  I  am  not  in  favor  of  that  kind  of  tariff 
reform  recommended  by  Mr.  Cleveland,  which  is  a  general 
reduction  of  the  duties  on  foreign  importations,  and  espe- 
cially on  raw  materials.  Now,  to  this  I  am  opposed,  first, 
because  it  is  an  injustice  to  American  citizens  in  every  part 
of  our  country  who  have  been  invited  to  engage  in  the  pro- 
cess of  manufacture,  and  a  still  greater  injustice  to  the 
millions  of  laboring  people  who  depend  upon  industries  thus 
protected.  Again,  the  policy  proposed  will  not  reduce  the 
revenue,  but  will  absolutely  increase  it,  and  thus  swell  the 
surplus  as  well  as  disturb  the  business  of  the  country.^ 

But  you  may  ask  me  how  I  would  reduce  the  surplus 
revenue.  I  answer  frankly  that  the  tariff  ought  to  be  care- 
fully revised,  with  a  view  to  correct  any  inequalities  or 
incongruities  that  have  grown  out  of  the  change  of  values 
since  the  passage  of  the  Act  of  1883;  that  every  imported 
article  which  does  not  compete  with  our  domestic  industry 
and  is  essential  to  the  comfort  and  wants  of  our  people, 
should  be  placed  upon  the  free  list;  that  every  raw  material 
of  industry  which  does  not  compete  with  our  own  produc- 


532  OPINIONS    OF    EMINENT   MEN. 

tions  should  be  specially  selected  for  the  free  list;  that 
wherever  any  industry  which  can  be  conducted  in  this 
country  with  reasonable  success  needs  a  moderate  increase 
of  duty  for  its  protection,  to  give  it,  and  in  this  way  check 
foreign  importations  and  lessen  the  revenue.  The  direct 
taxes  upon  American  productions  levied  by  our  internal 
revenue  laws,  which  interfere  with  the  industry  of  our  peo- 
ple, should  be  modified  or  repealed;  that  in  this  way  the 
revenues  of  the  government  should  be  reduced  so  as  to  sup- 
ply only  enough  revenue  to  pay  the  expenses  of  the  govern- 
ment, wisely  and  economically  administered,  and  to  carry 
out  the  provisions  of  the  sinking  fund  for  the  gradual  reduc- 
tion of  the  public  debt. 

TARIFF  REFORM.— GROVER  CLEVELAND. 

Our  present  tariff  laws,  the  vicious,  inequitable,  and 
illogical  source  of  unnecessary  taxation,  ought  to  be  at  once 
revised  and  amended.  These  laws,  as  their  primary  and 
plain  effect,  raise  the  price  to  consumers  of  all  articles  im- 
ported and  subject  to  duty,  by  precisely  the  sum  paid  for 
such  duties.  Thus  the  amount  of  the  duty  measures  the  tax 
paid  by  those  who  purchase  for  use  these  imported  articles. 
Many  of  these  things,  however,  are  raised  or  manufactured 
in  our  own  country,  and  the  duties  now  levied  upon  foreign 
goods  and  products  are  called  protection  to  these  home 
manufactures,  because  they  render  it  possible  for  those  of 
our  people  who  are  manufacturers  to  make  these  taxed  arti- 
cles and  sell  them  for  a  price  equal  to  that  demanded  for 
the  imported  goods  that  have  paid  customs  duty.  So  it 
happens  that  while  comparatively  a  few  use  the  imported 
articles,  millions  of  our  people,  who  never  used  and  never 
saw  any  of  the  foreign  products,  purchase  and  use  things  of 
the  same  kind  made  in  this  country,  and  pay  therefor  nearly 
or  quite  the  same  enhanced  price  which  the  duty  adds  to  the 
imported  articles.  Those  who  buy  imports  pay  the  duty 


PRESIDENT    CLEVELAND.  533 

charged  thereon  into  the  public  treasury,  but  the  great  ma- 
jority of  our  citizens  who  buy  domestic  articles  of  the  same 
class,  pay  a  sum  at  least  approximately  equal  to  this  duty  to 
the  home  manufacturer.  This  reference  to  the  operation  of 
our  tariff  laws  is  not  made  by  way  of  instruction,  but  in 
order  that  we  may  be  constantly  reminded  of  the  manner  in 
which  they  impose  a  burden  upon  those  who  consume  do- 
mestic products  as  well  as  those  who  consume  imported  arti- 
cles, and  thus  create  a  tax  upon  all  our  people. 

It  is  not  proposed  to  entirely  relieve  the  country  of  this 
taxation.  It  must  be  extensively  continued  as  the  source  of 
the  Government's  income  ;  and  in  a  readjustment  of  our 
tariff  the  interests  of  American  labor  engaged  in  manufac- 
ture should  be  carefully  considered,  as  well  as  the  preserva- 
tion of  our  manufacturers.  It  may  be  called  protection,  or 
by  any  other  name,  but  relief  from  the  hardships  and  dan- 
gers of  our  present  tariff  laws  should  be  devised  with 
especial  precaution  against  imperiling  the  existence  of  our 
manufacturing  interests.  But  this  existence  should  not 
mean  a  condition  which,  without  regard  to  the  public  wel- 
fare or  a  national  exigency,  must  always  insure  the  realiza- 
tion of  immense  profits  instead  of  moderately  profitable 
returns.  As  the  volume  and  diversity  of  our  national  activi- 
ties increase,  new  recruits  are  added  to  those  who  desire  a 
continuation  of  the  advantages  which  they  conceive  the  pres- 
ent system  of  tariff  taxation  directly  affords  them.  So 
stubbornly  have  all  efforts  to  reform  the  present  condition 
been  resisted  by  those  of  our  fellow-citizens  thus  engaged, 
that  you  can  hardly  complain  of  the  suspicion,  entertained 
to  a  certain  extent,  that  there  exists  an  organized  combina- 
tion all  along  the  line  to  maintain  their  advantage. 

We  are  in  the  midst  of  centennial  celebrations,  and  with 
becoming  pride  we  rejoice  in  American  skill  and  ingenuity, 
in  American  energy  and  enterprise,  and  in  the  wonderful 
natural  advantages  and  resources  developed  by  a  century's 


534  OPINIONS    OF   EMINENT   MEN. 

national  growth.  Yet  when  an  attempt  is  made  to  justify  a 
scheme  which  permits  a  tax  to  be  laid  upon  every  consumer 
in  the  land  for  the  benefit  of  our  manufacturers,  quite  beyond 
a  reasonable  demand  for  governmental  regard,  it  suits  the 
purposes  of  advocacy  to  call  our  manufactures  infant  indus- 
tries, still  needing  the  highest  and  greatest  degree  of  favor 
and  fostering  care  that  can  be  wrung  from  Federal  legis- 
lation. 

It  is  also  said  that  the  increase  in  the  price  of  domestic 
manufactures  resulting  from  the  present  tariff  is  necessary 
in  order  that  higher  wages  may  be  paid  to  our  workingmen 
employed  in  manufactories  than  are  paid  for  what  is  called 
the  pauper  labor  of  Europe.  All  will  acknowledge  the  force 
of  an  argument  which  involves  the  welfare  and  liberal  com- 
pensation of  our  laboring  people.  Our  labor  is  honorable  in 
the  eyes  of  every  American  citizen;  and  as  it  lies  at  the 
foundation  of  our  development  and  progress,  it  is  entitled, 
without  affectation  or  hypocrisy,  to  the  utmost  regard.  The 
standard  of  our  laborers'  life  should  not  be  measured  by  that 
of  any  other  country  less  favored,  and  they  are  entitled  to 
their  full  share  of  all  our  advantages. 

By  the  last  census  it  is  made  to  appear  that  of  the  17,392- 
099  of  our  population  engaged  in  all  kinds  of  industries 
7,670,493  are  employed  in  agriculture,  4,074,238  in  profes- 
sional and  personal  service  (2,934,876  of  whom  are  domestic 
servants  and  laborers),  while  1,810,256  are  employed  in 
trade  and  transportation,  and  3,837,112  are  classed  as  em- 
ployed in  manufacturing  and  mining. 

For  present  purposes,  however,  the  last  number  given 
should  be  considerably  reduced.  Without  attempting  to  enu- 
merate all,  it  will  be  conceded  that  there  should  be  deducted 
from  those  which  it  includes  375,143  carpenters  and  joiners, 
285,401  milliners,  dressmakers,  and  seamstresses,  172,726 
blacksmiths,  133,756  tailors  and  tailoresses,  102,473  masons, 
76,241  butchers,  41,309  bakers,  22,083  plasterers,  and  4,891 


PRESIDENT    CLEVELAND.  535 

engaged  in  manufacturing  agricultural  implements,  amount- 
ing in  the  aggregate  to  1,214,023,  leaving  2,623,089  persons 
employed  in  such  manufacturing  industries  as  are  claimed  to 
be  benefited  by  a  high  tariff. 

To  these  the  appeal  is  made  to  save  their  employment  and 
maintain  their  wages  by  resisting  a  change.  There  should 
be  no  disposition  to  answer  such  suggestions  by  the  allega- 
tion that  they  are  in  a  minority  among  those  who  labor,  and 
therefore  shall  forego  an  advantage,  in  the  interest  of  low 
prices  for  the  majority;  their  compensation,  as  it  may  be 
affected  by  the  operation  of  tariff  laws,  should  at  all  times  be 
scrupulously  kept  in  view;  and  yet  with  slight  reflection 
they  will  not  overlook  the  fact  that  they  are  consumers  with 
the  rest,  that  they,  too,  have  their  own  wants  and  those  of 
their  families  to  supply  from  their  earnings,  and  that  the 
price  of  the  necessaries  of  life,  as  well  as  the  amount  of  their 
wages,  will  regulate  the  measure  of  their  welfare  and 
comfort. 

But  the  reduction  of  taxation  demanded  should  be  so 
measured  as  not  to  necessitate  or  justify  either  the  loss  of 
employment  by  the  working  man  nor  the  lessening  of  his 
wages ;  and  the  profits  still  remaining  to  the  manufacturer, 
after  a  necessary  readjustment,  should  furnish  no  excuse  for 
the  sacrifice  of  the  interests  of  his  employes  either  in  their 
opportunity  to  work  or  in  the  diminution  of  their  compen- 
sation. Nor  can  the  worker  in  manufactures  fail  to  under- 
stand that  while  a  high  tariff  is  claimed  to  be  necessary  to 
allow  the  payment  of  remunerative  wages,  it  certainly  results 
in  a  very  large  increase  in  the  price  of  nearly  all  sorts  of 
manufactures,  which,  in  almost  countless  forms,  he  needs  for 
the  use  of  himself  and  his  family.  He  receives  at  the  desk  of 
his  employer  his  wages,  and  perhaps  before  he  reaches  his 
home  is  obliged,  in  a  purchase  for  family  use  of  an  article 
which  embraces  his  own  labor,  to  return  in  the  payment  of 
the  increase  in  price  which  the  tariff  permits,  the  hard-earned 
compensation  of  many  days  of  toil. 


536  OPINIONS    OF   EMINENT   MEN. 

The  farmer  and  the  agriculturist  who  manufacture  noth- 
ing, but  who  pay  the  increased  price  which  the  tariff  im- 
poses, upon  every  agricultural  implement,  upon  all  he  wears 
and  upon  all  he  uses  and  owns,  except  the  increase  of  his 
flocks  and  herds  and  such  things  as  his  husbandry  produces 
from  the  soil,  is  invited  to  aid  in  maintaining  the  present 
situation,  and  he  is  told  that  a  high  duty  on  imported  wool 
is  necessary  for  the  benefit  of  those  who  have  sheep  to  shear, 
in  order  that  the  price  of  their  wool  may  be  increased.  They 
of  course  are  not  reminded  that  the  farmer  who  has  no 
sheep  is  by  this  scheme  obliged,  in  his  purchases  of  clothing 
and  woolen  goods,  to  pay  a  tribute  to  his  fellow  farmer  as 
well  as  to  the  manufacturer  and  merchant;  nor  is  any  men- 
tion made  of  the  fact  that  the  sheep-owners  themselves  and 
their  households  must  wear  clothing  and  use  other  articles 
manufactured  from  the  wool  they  sell  at  tariff  prices,  and 
thus  as  consumers  must  return  their  share  of  this  increased 
price  to  the  tradesman. 

I  think  it  may  be  fairly  assumed  that  a  large  proportion 
of  the  sheep  owned  by  the  farmers  throughout  the  country 
are  found  in  small  flocks  numbering  from  twenty -five  to 
fifty.  The  dut}r  on  the  grade  of  imported  wool  which  these 
sheep  yield  is  10  cents  each  pound  if  of  the  value  of  30  cents 
or  less,  and  12  cents  if  of  the  value  of  more  than  30  cents. 
If  the  liberal  estimate  of  six  pounds  be  allowed  for  each 
fleece,  the  duty  thereon  would  be  60  or  72  cents,  and  this 
may  be  taken  as  the  utmost  enhancement  of  its  price  to  the 
farmer  by  reason  of  this  duty.  Eighteen  dollars  would  thus 
represent  the  increased  price  of  the  wool  from  twenty-five 
sheep,  and  $36  that  from  the  wool  of  fifty  sheep;  and  at 
present  values  this  addition  would  amount  to  about  one-third 
of  its  price.  If  upon  its  sale  the  farmer  receives  this  or  a 
less  tariff  profit,  the  wool  leaves  his  hands  charged  with  pre- 
cisely that  sum,  which  in  all  its  changes  will  adhere  to  it 
until  it  reaches  the  consumer.  When  manufactured  into 


PRESIDENT    CLEVELAND.  537 

cloth  and  other  goods  and  material  for  use,  its'  cost  is  not 
only  increased  to  the  extent  of  the  farmer's  tariff  profit,  but 
a  further  sum  has  been  added  for  the  benefit  of  the  manu- 
facturer under  the  operation  of  other  tariff  laws.  In  the 
meantime  the  day  arrives  when  the  farmer  finds  it  necessary 
to  purchase  woolen  goods  and  material  to  clothe  himself  and 
family  for  the  winter.  When  he  faces  the  tradesman  for 
that  purpose  he  discovers  that  he  is  obliged  not  only  to  re- 
turn in  the  way  of  increased  prices,  his  tariif  profit  on  the  wool 
he  sold,  and  which  then  perhaps  lies  before  him  in  manufac- 
tured form,  but  that  he  must  add  a  considerable  sum  thereto 
to  meet  a  further  increase  in  cost  caused  by  a  tariif  duty  on 
the  manufacture.  Thus  in  the  end  he  is  aroused  to  the  fact 
•that  he  has  paid  upon  a  moderate  purchase,  as  a  result  of  the 
tariif  scheme,  which  when  he  sold  his  wool  seemed  so  pro- 
fitable, an  increase  in  price  more  than  sufficient  to  sweep 
away  all  the  tariff  profit  he  received  upon  the  wool  he  pro- 
duced and  sold. 

"When  the  number  of  farmers  engaged  in  wool-raising  is 
compared  with  all  the  farmers  in  the  country,  and  the  small 
proportion  they  bear  to  our  population  is  considered;  when 
it  is  made  apparent  that,  in  the  case  of  a  large  part  of  those 
who  own  sheep,  the  benefit  of  the  present  tariff  on  wool  is 
illusory;  and  above  all,  when  it  must  be  conceded  that  the 
increase  of  the  cost  of  living  caused  by  such  tariff  becomes 
a  burden  upon  those  with  moderate  means  and  the  poor,  the 
employed  and  the  unemployed,  the  sick  and  well,  and  the 
young  and  old,  and  that  it  constitutes  a  tax  which,  with 
relentless  grasp,  is  fastened  upon  the  clothing  of  every  man, 
woman,  and  child  in  the  land,  reasons  are  suggested  why  the 
removal  or  reduction  of  this  duty  should  be  included  in  a 
revision  of  our  tariff  laws. 

In  speaking  of  the  increased  cost  to  the  consumer  of  our 
home  manufactures,  resulting  from  a  duty  laid  upon  im- 
ported articles  of  the  same  description,  the  fact  is  not  over- 


538  OPINIONS    OF    EMINENT   MEN. 

looked  that  competition  among  our  domestic  producers 
sometimes  has  the  effect  of  keeping  the  price  of  their  pro- 
ducts below  the  highest  limit  allowed  by  such  duty.  But  it 
is  notorious  that  this  competition  is  too  often  strangled  by 
combinations  quite  prevalent  at  this  time,  and  frequently 
called  trusts,  which  have  for  their  object  the  regulation  of 
the  supply  and  price  of  commodities  made  and  sold  by  mem- 
bers of  the  combination.  The  people  can  hardly  hope  for 
any  consideration  in  the  operation  of  these  selfish  schemes. 

If,  however,  in  the  absence  of  such  combination,  a 
healthy  and  free  competition  reduces  the  price  of  any  parti- 
cular dutiable  article  of  home  production,  below  the  limit 
which  it  might  otherwise  reach  under  our  tariff  laws,  and  if, 
with  such  reduced  price,  its  manufacture  continues  to  thrive, 
it  is  entirely  evident  that  one  thing  has  been  discovered 
which  should  be  carefully  scrutinized  in  an  effort  to  reduce 
taxation. 

The  necessity  of  combination  to  maintain  the  price  of  any 
commodity  to  the  tariff  point,  furnishes  proof  that  some  one 
is  willing  to  accept  lower  prices  for  such  commodity,  and 
that  such  prices  are  remunerative  ;  and  lower  prices  pro- 
duced by  competition  prove  the  same  thing.  Thus  where 
either  of  these  conditions  exists  a  case  would  seem  to  be 
presented  for  an  easy  reduction  of  taxation. 

The  considerations  which  have  been  presented  touching 
our  tariff  laws  are  intended  only  to  enforce  an  earnest  rec- 
ommendation that  the  surplus  revenues  of  the  Government 
be  prevented  by  the  reduction  of  our  customs  duties,  and,  at 
the  same  time,  to  emphasize  a  suggestion  that  in  accomplish- 
ing this  purpose,  we  may  discharge  a  double  duty  to  our 
people  by  granting  to  them  a  measure  of  relief  from  tariff 
taxation  in  quarters  where  it  is  most  needed  and  from 
sources  where  it  can  be  most  fairly  and  justly  accorded. 

Nor  can  the  presentation  made  of  such  considerations  be, 
with  any  degree  of  fairness,  regarded  as  evidence  of  un- 


PRESIDENT    CLEVELAND.  539 

friendliness  toward  our  manufacturing  interests,  or  of  any 
lack  of  appreciation  of  their  value  and  importance. 

These  interests  constitute  a  leading  and  most  substantial 
element  of  our  national  greatness,  and  furnish  the  proud 
proof  of  our  country's  progress.  But  if  in  the  emergency 
that  presses  upon  us  our  manufacturers  are  asked  to  surren- 
der something  for  the  public  good  and  to  avert  disaster, 
their  patriotism,  as  well  as  a  grateful  recognition  of  advan- 
tages already  afforded,  should  lead  them  to  willing  coopera- 
tion. No  demand  is  made  that  they  shall  forego  all  the 
benefits  of  governmental  regard;  but  they  cannot  fail  to  be 
admonished  of  their  duty,  as  well  as  their  enlightened  self- 
interest  and  safety,  when  they  are  reminded  of  the  fact  that 
financial  panic  and  collapse,  to  which  the  present  condition 
tends,  afford  no  greater  shelter  or  protection  to  our  manu- 
factures than  to  our  other  important  enterprises.  Opportu- 
nity for  safe,  careful,  and  deliberate  reform  is  now  offered; 
and  none  of  us  should  be  unmindful  of  a  time  when  an 
abused  and  irritated  people,  heedless  of  those  who  have 
resisted  timely  and  reasonable  relief,  may  insist  upon  a 
radical  and  sweeping  rectification  of  their  wrongs. 

The  difficulty  attending  a  wise  and  fair  revision  of  our 
tariff  laws  is  not  underestimated.  It  will  require  on  the  part 
of  the  Congress  great  labor  and  care,  and  especially  a  broad 
and  national  contemplation  of  the  subject,  and  a  patriotic  dis- 
regard of  such  local  and  selfish  claims  as  are  unreasonable 
and  reckless  of  the  welfare  of  the  entire  country. 

Under  our  present  laws  more  than  four  thousand  articles 
are  subject  to  duty.  Many  of  these  do  not  in  any  way  com- 
pete with  our  own  manufactures,  and  many  are  hardly  worth 
attention  as  subjects  of  revenue.  A  considerable  reduction 
can  be  made  in  the  aggregate,  by  adding  them  to  the  free 
list.  The  taxation  of  luxuries  presents  no  features  of  hard- 
ship; but  the  necessaries  of  life  used  and  consumed  by  all 
the  people,  the  duty  upon  which  adds  to  the  cost  of  living 
in  every  home,  should  be  greatly  cheapened. 


540  OPINIONS   OF   EMINENT   MEN. 

The  radical  reduction  of  the  duties  imposed  on  raw  mate- 
rial used  in  manufactures,  or  its  free  importation,  is  of  course 
an  important  factor  in  any  effort  to  reduce  the  price  of  these 
necessaries  ;  it  would  not  only  relieve  them  from  the 
increased  cost  caused  by  the  tariff  on  such  material,  but  the 
manufactured  product  being  thus  cheapened,  that  part  of  the 
tariff  now  laid  upon  such  product,  as  a  compensation  to  our 
manufacturers  for  the  present  price  of  raw  material,  could  be 
accordingly  modified.  Such  reduction,  or  free  importation, 
would  serve  besides  to  largely  reduce  the  revenue.  It  is  not 
apparent  how  such  a  change  can  have  any  injurious  effect 
upon  our  manufacturers.  On  the  contrary,  it  would  appear 
to  give  them  a  better  chance  in  foreign  markets  with  the 
manufacturers  of  other  countries,  who  cheapen  their  wares 
by  free  material.  Thus  our  people  might  have  the  opportu- 
nity of  extending  their  sales  beyond  the  limits  of  home  con- 
sumption—  saving  them  from  the  depression,  interruption 
in  business,  and  loss  caused  by  a  glutted  domestic  market, 
and  affording  their  employes  more  certain  and  steady  labor, 
with  its  resulting  quiet  and  contentment. 

The  question  thus  imperatively  presented  for  solution 
should  be  approached  in  a  spirit  higher  than  partizanship 
and  considered  in  the  light  of  that  regard  for  patriotic  duty 
which  should  characterize  the  action  of  those  intrusted  with 
the  weal  of  a  confiding  people.  But  the  obligation  to  de- 
clared party  policy  and  principle  is  not  wanting  to  urge 
prompt  and  effective  action.  Both  of  the  great  political 
parties  now  represented  in  the  Government  have,  by  re- 
peated and  authoritative  declarations,  condemned  the  condi- 
tion of  our  laws  which  permit  the  collection  from  the  people 
of  unnecessary  revenue,  and  have,  in  the  most  solemn  man- 
ner, promised  its  correction;  and  neither  as  citizens  or 
partisans  are  our  countrymen  in  a  mood  to  condone  the 
deliberate  violation  of  these  pledges. 

Our  progress  toward  a  wise  conclusion  will  not  be  im- 


OPINIONS    OF   EMINENT   MEN.  541 

proved  by  dwelling  upon  the  theories  of  protection  and  free 
trade.  This  savors  too  much  of  bandying  epithets.  It  is  a 
condition  which  confronts  us  —  not  a  theory.  Relief  from 
this  condition  may  involve  a  slight  reduction  of  the  advan- 
tages which  we  award  our  home  productions,  but  the  entire 
withdrawal  of  such  advantages  should  not  be  contemplated. 
The  question  of  free  trade  is  absolutely  irrelevant ;  and  the 
persistent  claim  made  in  certain  quarters,  that  all  efforts  to 
relieve  the  people  from  unjust  and  unnecessary  taxation  are 
schemes  of  so-called  free-traders,  is  mischievous  and  far 
removed  from  any  consideration  for  the  public  good. 

The  simple  and  plain  duty  which  we  owe  the  people  is  to 
reduce  taxation  to  the  necessary  expenses  of  an  economical 
operation  of  the  Government,  and  to  restore  to  the  business 
of  the  country  the  money  which  we  hold  in  the  Treasury 
through  the  perversion  of  governmental  powers.  These 
things  can  and  should  be  done  with  safety  to  all  our  indus- 
tries, without  danger  to  the  opportunity  for  remunerative 
labor  which  our  workingmen  need,  and  with  benefit  to  them 
and  all  our  people,  by  cheapening  their  means  of  subsistence 
and  increasing  the  measure  of  their  comforts. 

HON.  GEO.  F.  EDMUNDS. 

Besides  all  this,  the  advocates  of  free  trade  seem  always  to 
overlook  the  very  important  fact  in  social  economy  that 
every  act  of  transportation  is  itself  a  constant  tax  without 
revenue,  and  wherever  it  can  be  dispensed  with  or  dimin- 
ished there  is  clear  gain.  The  farmer  whose  wheat  field  is 
two  miles  from  his  granary  is  obviously  a  loser  compared 
with  him  whose  fields  and  barns  are  in  the  immediate  neigh- 
borhood of  each  other.  To  transport  wheat  from  Chicago 
to  Liverpool,  to  be  returned  in  the  form  of  flour  for  con- 
sumption in  the  West,  or  to  carry  cotton  from  Mississippi  to 
the  mills  of  Manchester,  to  return  in  the  form  of  cloths  for 
the  people  of  the  Mississippi  Valley,  will  be  nowadays 


542  OPINIONS   OF   EMINENT   MEN. 

admitted  to  be  absurd  as  a  mere  useless  waste  of  human 
energy.  A  policy  that  discourages  such  a  course,  and  stim- 
ulates production,  manufactures,  and  the  interchange  of 
commodities  within  the  shortest  possible  distance  of  each 
other,  is  a  far  different  thing  from  that  which  the  article  of 
Mr.  Watterson  states  to  have  been  a  grievance  set  forth  in 
the  Declaration  of  Independence  as  "  cutting  off  our  trade 
with  all  parts  of  the  world."  The  wrong  our  fathers  then 
complained  of  was  that  one  body  of  British  subjects,  resid- 
ing in  one  part  of  the  empire,  were  denied  the  privileges 
that  were  granted  to  other  subjects  residing  in  another  part 
of  the  empire,  and  it  is  perhaps  not  too  much  to  say  that  had 
the  customs  and  navigation  laws  of  Great  Britain  been  framed 
upon  the  principle  that  ours  are  required  to  be,  giving  no 
preference  to  the  ports  of  any  particular  part  of  the  empire, 
and  no  advantages  to  one  set  of  subjects  that  could  not  be 
equally  enjoyed  by  others,  the  Revolution  of  1776  would 
not  have  occurred,  and  we  might  at  this  time  be  still  subjects 
of  her  majesty.  We  may  now  all  feel  grateful  that  such  a 
policy  of  injustice  existed  for  the  time,  for  it  helped  to  make 
us  free. —  Harper's  Magazine,  Feb.,  1888.  Copyrighted  1888. 

PROTECTION  A  MORAL  QUESTION  —  HENRY  WARD 
BEECHER. 

The  system  of  protection  is  maintained  by  persuading  the 
worldngmen  that  it  is  necessary  to  supply  them  with  work 
and  wages.  The  state  of  things  which  exists  now  among 
the  manufacturing  workmen  is  the  sharpest  commentary 
which  can  be  made  upon  this  pretense.  Multitudes  are  out 
of  work  and  nearly  all  reduced  in  wages.  It  is  my  judg- 
ment that  free  trade  would  be  a  far  greater  boon  to  the 
working  classes  than  any  other  which  could  be  given  to 
them.  Out  of  17,000,000  people  who  are  earning  their  own 
living  in  this  country,  less  than  500,000  can  by  any  possi- 
bility derive  any  benefit  from  the  protective  system,  this 


OPINIONS   OF   EMINENT   MEN. 


being  the  outside  number  of  those  who  are  employed  in  any 
manufacture  which  is  benefited  in  any  way  by  keeping  up  a 
tariff.  Even  if  the  wages  of  these  500,000  were  made  higher 
by  the  tariff,  I  should  denounce  the  injustice  of  taxing 
17,000,000  other  men,  equally  hard-working  and  equally 
deserving,  for  the  sake  of  coddling  500,000.  But  1  do  not 
believe  that  the  tariff  raises  the  wages  or  increases  the  pros- 
perity of  any  part  of  the  working  classes.  It  certainly  is 
not  keeping  up  their  wages  now  ;  and  even  when  their 
wages  do  rise  for  a  short  time,  the  price  of  everything  which 
they  use  rises  faster  than  their  wages,  so  that  they  are  worse 
off  at  the  end  than  they  were  at  the  beginning. 

But  take  away  all  tariffs  and  all  indirect  taxation,  and  a 
heavy  burden  would  be  lifted  off  the  shoulders  of  the  labor- 
ing men,  who  now  pay  the  great  bulk  of  the  national  taxes. 
Freedom  of  commerce  would  encourage  industry  of  every 
description.  Wages  would  not  fall,  but  would  rather  rise  ; 
while  the  working  classes  would  get  far  more  for  their 
money  than  they  ever  can  under  a  tariff. 

But  while  others  will  talk  with  you  about  figures,  and  tell 
you  what  are  the  results  of  protection  upon  the  business  of 
the  country,  I  plead  for  the  principle  of  liberty.  There 
have  always  been  plenty  of  people  in  this  free  country  to 
doubt  the  expediency  of  freedom.  Liberty  of  conscience 
was  thought  dangerous,  but  our  forefathers  fought  battles 
for  that,  and  gained  it  for  us.  Liberty  for  the  slave  was 
thought  to  be  full  of  peril,  and  predictions  abounded  on 
every  side  that  emancipation  would  bring  ruin  and  blood- 
shed upon  the  country.  But  we  liberated  the  slaves,  and  it 
has  been  found  by  the  South  itself  that  liberty  was  better 
than  slavery,  and  that  the  South  has  prospered  under  liberty 
as  it  never  did  prosper  or  could  have  prospered  before. 
Now  I  take  my  stand  on  liberty  of  commerce,  as  just  as 
essential  and  just  as  sound  as  liberty  of  conscience,  liberty 
of  speech,  liberty  of  the  press,  and  liberty  of  the  person.  I 


542  OPINIONS   OP   EMINENT   MEN. 

believe  that  liberty  is  just  as  safe  and  just  as  necessary  in 
commerce  as  in  anything  else,  and  I  look  upon  this  battle  for 
freedom  of  commerce  as  only  one  part  of  the  great  battle  for 
freedom  which  we  have  been  fighting  for  many  years. 

I  reject  the  doctrine  of  "Protection,"  as  opposed,  not  only 
to  the  principles  of  liberty,  but  to  the  essential  principles  of 
Christianity.  I  regard  it  as  in  its  very  essence  anti-Christian 
and  immoral.  And  the  fact  that  such  theories  as  have 
been  advanced  by  the  high  protectionists  have  found  so  much 
favor  in  this  country  is  not  creditable  to  its  Christian  char- 
acter. The  fundamental  doctrine  of  Christianity  is  that  all 
men  are  brethren.  The  fundamental  doctrine  of  protection- 
ism is  that  all  men  are  not  brethren.  Christianity  teaches 
that  all  men,  in  all  parts  of  the  world,  should  love  each 
other.  Protectionism  teaches  that  all  men  on  one  side  of  an 
imaginary  line  should  hate,  or  at  least  disregard,  all  who  live 
on  the  other  side  of  that  line.  Not  only  so,  but  protection- 
ism teaches  Christians  to  hate  their  fellow  Christians  more 
than  they  do  pagans.  We  do  not  build  up  our  tariff  against 
heathen  countries.  Our  Congressmen  are  not  specially  con- 
cerned to  keep  out  the  products  of  Africa.  It  is  against 
Christian  countries  that  all  the  energy  of  protectionism  is 
directed.  And  England,  the  country  which  is  most  like 
our  own  in  matters  of  religion,  being  all  Christian  and 
mainly  Protestant,  i's  the  very  country  which  our  protection- 
ist Protestant  Christians  in  America  hate  the  most  and 
strive  to  injure  the  most.  We  send  missionaries  abroad  to 
convert  pagans  into  Christians  and  teach  them  the  arts  of 
civilized  life.  And  then,  the  moment  the  missionaries  have, 
with  infinite  pains,  taught  the  converted  pagan  to  make 
anything  fit  to  send  to  this  market,  we  hasten  to  build  up  a 
high  tariff  wall  to  keep  it  out. 


OPINIONS   OF   EMINENT   MEN.  545 

EGBERT  P.  PORTER. 

If  protection  has  been  so  ruinous  to  the  United  States, 
why  have  we,  in  twenty- five  years  of  it,  increased  our  popu- 
lation 20,000,000?  Doubled  the  population  of  our  cities? 
Increased  our  coal  product  from  14,000,000  tons  to  100,000,- 
000  tons?  Increased  our  iron-ore  output  from  900,000  tons 
to  9,000,000  tons?  Increased  the  number  employed  in  our 
metal  industries  from  52,000  to  350,000?  Increased  the 
number  employed  in  our  wood  industries  from  130,000  per- 
sons to  350,000  persons?  The  number  employed  in  our 
woolen  industries  from  60,000  to  160,000?  Robbed  Eng- 
land of  55,000,000  customers  in  the  cotton  industry?  Em- 
ploy 35,000  instead  of  12,000  in  the  pottery,  stoneware,  and 
glass  industries?  Employ  30,000  instead  of  6,000  in  the 
chemical  industry  ?  Increased  our  railway  mileage  from 
30,000  to  130,000  miles?  Increased  the  number  of  our 
farms  from  2,000,000  to  4,000,000?  And  their  value  from 
$6,000,000,000  to  $10,000,000,000?  Our  production  of 
cereals  from  1,230,000,000  bushels  to  nearly  3,000,000,000 
bushels?  Our  live  stock  from  $1,000,000,000  to  more  than 
$2,000,000,000?  Our  flocks  from  22,000,000  to  upwards  of 
50,000,000?  Our  wool  products  from  60,000,000  pounds  to 
350,000,000  pounds?  The  number  of  persons  engaged  in 
gainful  occupations  from  12,500,000  to  17,500,000?  And 
our  aggregate  wealth  to  such  figures  that  it  makes  Amer- 
icans dizzy  to  contemplate  the  totals,  and  fills  the  advocates 
of  British  free  trade  with  envy,  hatred,  and  other  wrongful 
passions,  in  trying  to  explain  that  which  isn't?  Why  are 
the  wages  of  the  laborer  higher  here  than  in  any  other 
country?  Why  do  a  greater  percentage  of  workingmen 
own  their  homes?  Why  do  their  children  go  to  school,  well 
fed  and  well  clothed?  Why  is  labor  respected,  and  the 
workingman  supported  in  every  legitimate  endeavor  to  bet- 
ter his  condition?  Why  do  a  greater  percentage  of  work- 
men become  masters  here  than  in  any  other  country  in  the 
world? 


546  OPINIONS   OF   EMINENT   MEN. 

HENRY  GEORGE.* 

Free  trade  is  the  natural  trade  —  the  trade  that  goes  on 
in  the  absence  of  artificial  restrictions.  It  is  protection  that 
had  to  be  invented.  But  instead  of  being  invented  in  the 
United  States,  it  was  in  full  force  in  Great  Britain  long 
before  the  United  States  were  thought  of.  It  would  be 
nearer  the  truth  to  say  that  protection  originated  in  Great 
Britain,  for,  if  the  system  did  not  originate  there,  it  was 
fully  developed  there,  and  it  is  from  that  country  that  it  has 
been  derived  by  us.  Nor  yet  did  the  reaction  against  it 
originate  in  Great  Britain,  but  in  France,  among  a  school  of 
eminent  men  headed  by  Quesnay,  who  were  Adam  Smith's 
predecessors  and  in  many  things  his  teachers,  .  .  . 

Nor  could  protection  have  reached  its  present  height  in 
the  United  States  but  for  the  Civil  War.  While  attention 
was  concentrated  on  the  struggle,  and  mothers  were  sending 
their  sons  to  the  battle -field,  the  interests  that  sought  protec- 
tion took  advantage  of  the  patriotism  that  was  ready  for  any 
sacrifice  to  procure  protective  taxes  such  as  had  never  before 
been  dreamed  of  —  taxes  which  they  have  ever  since  managed 
to  keep  in  force,  and  even  in  many  cases  to  increase.  .  .  . 

To  admit  that  labor  needs  protection  is  to  acknowledge  its 
inferiority;  it  is  to  acquiesce  in  an  assumption  that  degrades 
the  workman  to  the  position  of  a  dependent,  and  leads  logic- 
ally to  the  claim  that  the  employee  is  bound  to  vote  in  the 
interests  of  the  employer  who  provides  him  with  work. 
There  is  something  in  the  very  word  "protection"  that 
ought  to  make  workingmen  cautious  of  accepting  anything 
presented  to  them  under  it.  The  protection  of  the  masses 
has  in  all  times  been  the  pretense  of  tyranny  —  the  plea  of 
monarchy,  of  aristocracy,  of  special  privilege  of  every  kind. 
The  slave-owners  justified  slavery  as  protecting  the  slaves. 
British  misrule  in  Ireland  is  upheld  on  the  ground  that  it  is 
for  the  protection  of  the  Irish.  But,  whether  under  a  mon- 

*  Protection  or  Free  Trade,  published  by  Henry  George,  25  Ann  St.,  N.  Y. 


OPINIONS    OF    EMINENT    MEN.  547 

archy  or  under  a  republic,  is  there  an  instance  in  the  history 
of  the  world  in  which  the  il  protection "  of  the  laboring 
masses  has  not  meant  their  oppression?  The  protection  that 
those  who  have  got  the  law-making  power  into  their  hands 
have  given  to  labor,  has  at  best  always  been  the  protection 
that  man  gives  to  cattle  —  he  protects  them  that  he  may  use 
and  eat  them. 

HON.  WM.  McKINLEY,  JR 

If  free  raw  material  will  cheapen  the  product  of  the 
factory  and  the  mill,  of  course  by  the  same  logic  the  products 
of  the  mill  will  be  cheapened  if  competing  products  are 
admitted  free  of  duty.  The  products  of  the  New  England 
mills,  the  New  Jersey  potteries,  and  the  Pennsylvania  fur- 
naces have  no  higher  claim  upon  the  fostering  care  of 
the  government  and  the  considerate  concern  of  Congress 
than  the  iron  mines  of  the  Northwest,  the  wool  producers  of 
Ohio  and  West  Virginia,  the  coal  of  Maryland,  the  clay  of 
Missouri,  the  salt  of  Michigan  and  New  York,  the  marble 
of  Vermont  and  Connecticut;  and  no  unselfish  patriot  thinks 
so.  I  assure  you  there  is  no  wayside  station  in  the  work  of 
cutting  down  duties  when  once  entered  upon.  No  reason 
will  be  found,  surely  none  will  be  accepted,  why  we  should 
stop  half  way  in  our  so-called  mission  for  the  overburdened 
consumer.  The  very  moment  wool  is  put  on  the  free  list  in 
the  House  of  Representatives  in  "Washington,  the  next  vote 
will  put  New  England  cloth  upon  the  free  list.  [Applause 
and  cries  of  "  Good!  "]  Don't  you  make  any  mistake  about 
it.  [Applause.]  Wool  has  got  more  friends  on  the  floor  of 
the  American  Congress  than  any  other  American  interest. 
[Applause.]  Protection  will  not  respond  to  the  beck  of  one 
interest  and  turn  a  deaf  ear  to  the  earnest  calls  of  another. 
Seven  and  three-quarters  millions  of  farmers,  more  than  one- 
eighth  of  our  entire  population,  will  not  tolerate  a  discrim- 
ination against  their  products,  and  that  might  as  well  be 
understood  now. 


548  OPINIONS    OF   EMINENT   MEN. 

HON.  WM.  E.  GLADSTONE. 

"  Well,  now,  there  is  also  an  idea  that  America  is  pursu- 
ing a  course  of  profound  wisdom  in  regard  to  its  protective 
system,  and  we  are  told  that  under  the  blessed  shelter  of  a 
system  of  that  kind,  the  tender  infancy  of  trades  is  cherished, 
which  afterwards,  having  obtained  vigor,  will  go  forth  into 
neutral  markets  and  possess  the  world.  Gentlemen,  is  that 
true  ?  America  has  been  too  long  in  various  degrees  a  pro- 
tective country.  Have  the  manufacturers  of  America  gone 
forth  and  possessed  the  world  ?  How  do  they  compete  with 
you  in  those  quarters  of  the  world  which  are,  speaking  gen- 
erally, outside  the  influences  of  protection  ?  Gentlemen,  to 
the  whole  of  Asia,  to  the  whole  of  Africa,  and  to  the  whole 
of  Australasia  —  which  in  the  main  are  outside  this  question 
and  may  fairly  be  described  in  the  rough  as  presenting  to  us 
neutral  markets,  where  we  meet  America  without  fear  or 
favor,  one  way  or  the  other  —  the  whole  of  the  exports  of 
the  United  States  of  manufactured  goods  of  those  countries 
amount  to  £4,751,000,  while  the  exports  to  those  same  quar- 
ters from  the  United  Kingdom  were  £78,140,000.  Gentle- 
men, the  fact  is  this  :  America  is  a  young  country,  with 
enormous  vigor  and  enormous  internal  resources.  She  has 
committed  —  I  say  it,  I  hope,  not  with  disrespect ;  I  say  it 
with  strong  and  cordial  sympathy,  but  with  much  regret  — 
she  is  committing  errors  of  which  we  set  her  an  example. 
But  from  the  enormous  resources  of  her  home  market,  the 
development  of  which  internally  is  not  touched  by  protec- 
tion, she  is  able  to  commit  those  errors  with  less  fatal  conse- 
quences upon  her  people  than  we  experienced  when  we  com- 
mitted them ;  and  the  enormous  development  of  American 
resources  within  casts  almost  entirely  into  the  shade  the 
puny  character  of  the  export  of  her  manufactures  to  the 
neutral  markets  of  the  world.  ...  I  will  say  this,  that 
as  long  as  America  adheres  to  the  protective  system  your 
commercial  primacy  is  secure.  Nothing  in  the  world  can 


OPINIONS   OF   EMINENT   MEN.  549 

wrest  it  from  you  while  America  continues  to  fetter  her  own 
strong  hands  and  arms,  and  with  these  fettered  arms  is  con- 
tent to  compete  with  you,  who  are  free,  in  neutral  markets. 
And  as  long  as  America  follows  the  doctrine  of  protection, 
or  as  long  as  America  follows  the  doctrines  now  known  as 
those  of  fair  trade,  you  are  perfectly  safe,  and  you  need  not 
allow,  any  of  you,  even  your  lightest  slumbers  to  be  dis 
turbed  by  the  fear  that  America  will  take  from  you  your 
commercial  primacy." — [Speech  at  Leeds,  England,  1881.] 

HON.  GEO.  F.  HOAR. 

The  instincts  of  the  workingmen,  as  it  seems  to  me  it  is 
no  flattery  to  say,  may  at  least  be  supposed  to  be  equal  to 
the  instincts  of  birds.  How  is  it  that  you  account  for  that 
constant  stream  of  emigration  westward  from  the  great  man- 
ufacturing nations  of  Europe,  which  has  gained  and  grown 
with  the  beginning  and  growth  of  the  protective  policy  in 
this  country  ?  Can  any  of  you  think  of  a  statesman  whose 
reputation  has  survived  as  a  man  of  the  first-class  the  falling 
of  the  gravel  upon  his  coffin,  who  has  not  left  on  record  his 
judgment  that  the  glory  and  the  prosperity  and  the  inde- 
pendence of  America  depended  upon  achieving  and  main- 
taining the  independence  of  her  manufactures  ? 

DANIEL  O'CONNELL. 

"  Protection  means  an  additional  sixpence  for  each  loaf  ; 
that  is  the  Irish  of  it.  If  it  were  not  for  protection,  the  loaf 
would  sell  for  a  shilling  ;  but,  as  it  is  protected,  it  will  sell 
for  one  and  sixpence.  Protection  is  the  English  for  six- 
pence, and  what  is  worse,  it  is  the  English  for  an  extorted 
sixpence.  The  real  meaning  of  protection,  therefore,  is  rob- 
bery ;  robbery  of  the  poor  by  the  rich.  I  speak  of  my  own 
knowledge  of  Ireland,  as  one  of  the  representatives  of  Ire- 
land, and  I  say  that,  if  the  corn  law  was  of  any  use  anywhere, 
it  would  be  valuable  in  Ireland,  which  is  essentially  an  agri- 


550  OPINIONS   OF    EMINENT   MEN. 

cultural  country.  If  tliat  enactment  raised  wages  anywhere, 
it  would  do  so  in  a  country  purely  agricultural.  But  are 
wages  raised  in  Ireland  in  consequence  of  its  existence  ? 
Oh,  no.  For,  unhappily,  you  can  get  men  to  work  there  for 
fourpence  a  day.  The  laborer  there  thinks  he  is  a  bountiful 
benefactor  who  pays  him  sixpence  a  day,  and  he  feels 
supremely  blessed  if  he  gets  eightpence  a  day.  There  is  the 
effect  of  the  corn  law  for  you.  It  is  in  full  force  in  Ireland, 
and  doing  all  it  can  for  that  country  ;  and  yet  this  is  the 
state  of  wages  there,  and  what  is  worse,  there  is  very  little 
employment  for  the  laborer  even  at  these  wages." 

GEORGE  WASHINGTON. 

Congress  have  repeatedly,  and  not  without  success,  directed 
their  attention  to  the  encouragement  of  manufactures.  The 
object  is  of  too  much  consequence  not  to  insure  a  continu- 
ance of  their  efforts  in  every  way  which  shall  appear  eligible. 

ALEXANDER  HAMILTON. 

An  extensive  domestic  market  for  the  surplus  produce  of 
the  soil  is  of  the  first  consequence.  It  is,  of  all  things,  that 
which  most  effectually  conduces  to  a  flourishing  state  of 
agriculture. 

BENJAMIN  FRANKLIN. 

Every  manufacturer  encouraged  in  our  country  makes 
part  of  a  market  for  provisions  within  ourselves,  and  saves 
so  much  money  to  the  country  as  must  otherwise  be  exported 
to  pay  for  the  manufactures  he  supplies. 

THOMAS  JEFFERSON. 

"We  must  now  place  our  manufacturers  by  the  side  of  the 
agriculturists.  .  .  .  Experience  has  taught  me  that  manufac- 
turers are  now  as  necessary  to  our  independence  as  to  our 
comfort. 


OPINIONS    OF    EMINENT   MEN.  551 

JAMES  MADISON. 

It  will  be  worthy  the  just  and  provident  care  of  Congress 
to  make  such  further  alterations  in  the  tariff  as  will  more 
especially  protect  and  foster  the  several  branches  of  manu- 
facture which  have  been  recently  instituted  and  extended 
by  the  laudable  exertions  of  our  citizens. 

JAMES  MONROE. 

Our  manufactures  require  the  systematic  and  fostering 
care  of  the  government.  .  .  .  Equally  important  is  it  to  pro- 
vide at  home  a  market  for  our  raw  materials. 

JOHN  QUINCY  ADAMS. 

The  great  interests  of  an  agricultural,  commercial,  and 
manufacturing  nation  are  so  linked  in  union  together  that 
no  permanent  cause  of  prosperity  to  one  of  them  can  operate 
without  extending  its  influence  to  the  others. 

JOHN  C.  CALHOUN. 

When  our  manufactures  are  grown  to  a  certain  proportion, 
as  they  will  under  the  fostering  care  of  the  government,  .  .  . 
the  farmer  will  find  a  ready  market  for  his  surplus  produce, 
and,  what  is  of  almost  equal  consequence,  a  certain  and  cheap 
supply  for  all  his  wants. 

ANDREW  JACKSON. 

Upon  the  success  of  our  manufactures,  as  the  handmaid 
of  agriculture  and  commerce,  depends  in  a  great  measure 
the  independence  of  our  country,  and  none  can  feel  more 
sensibly  than  I  do  the  necessity  of  encouraging  them. 


LAST  BATE 


RY 


OW 


14  DAY  USE 

RETURN  TO  DESK  FROM  WHICH  BORROWED 

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